<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 19, 1996
REGISTRATION NO. 333-
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
DOLLAR FINANCIAL GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------
NEW YORK 6099 13-2997911
(STATE OR OTHER (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
JURISDICTION OF CLASSIFICATION NUMBER) IDENTIFICATION NO.)
INCORPORATION OR
ORGANIZATION)
<TABLE>
<S> <C> <C>
ALBUQUERQUE INVESTMENTS, INC. NEW MEXICO 85-0399526
ANY KIND CHECK CASHING CENTERS, INC. ARIZONA 86-0557168
CHECK MART OF LOUISIANA, INC. LOUISIANA 71-1315737
CHECK MART OF NEW JERSEY, INC. NEW JERSEY 22-3420627
CHECK MART OF NEW MEXICO, INC. NEW MEXICO 85-0335449
CHECK MART OF PENNSYLVANIA, INC. PENNSYLVANIA 23-2834068
CHECK MART OF TEXAS, INC. TEXAS 74-2771841
CHECK MART OF UTAH, INC. UTAH 87-0528325
CHECK MART OF WASHINGTON, INC. WASHINGTON 91-1649319
CHECK MART OF WASHINGTON, D.C., INC. WASHINGTON, D.C. 52-1958877
CHECK MART OF WISCONSIN, INC. WISCONSIN 23-2815607
DFG WAREHOUSING CO., INC. DELAWARE pending
DOLLAR FINANCIAL INSURANCE CORP. PENNSYLVANIA 23-2817578
DOLLAR INSURANCE ADMINISTRATION CORP. DELAWARE 23-2815068
FINANCIAL EXCHANGE COMPANY OF MICHIGAN, INC. MICHIGAN 13-3222675
FINANCIAL EXCHANGE COMPANY OF OHIO, INC. OHIO 13-2974774
FINANCIAL EXCHANGE COMPANY OF PENNSYLVANIA, INC. PENNSYLVANIA 13-2965414
FINANCIAL EXCHANGE COMPANY OF PITTSBURGH, INC. DELAWARE 23-2608595
FINANCIAL EXCHANGE COMPANY OF VIRGINIA, INC. DELAWARE 23-2669975
L.M.S. DEVELOPMENT CORPORATION ARIZONA 86-0596496
MONETARY MANAGEMENT CORP. PENNSYLVANIA 23-2793961
MONETARY MANAGEMENT CORPORATION OF PENNSYLVANIA, INC. DELAWARE 23-2709366
MONETARY MANAGEMENT OF CALIFORNIA, INC. CALIFORNIA 33-0207279
MONETARY MANAGEMENT OF MARYLAND, INC. MARYLAND 52-1958876
MONETARY MANAGEMENT OF NEW YORK, INC. NEW YORK 13-3377328
PACIFIC RING ENTERPRISES, INC. CALIFORNIA 95-3779658
U.S. CHECK EXCHANGE LIMITED PARTNERSHIP ARIZONA 33-0069730
(EXACT NAME OF REGISTRANT (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
AS SPECIFIED IN ITS CHARTER) INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
1436 LANCASTER AVENUE, SUITE 210
BERWYN, PENNSYLVANIA 19312-1288
(610) 296-3400
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
AGENT FOR SERVICE)
----------------
(Continued on page 2)
<PAGE>
DONALD F. GAYHARDT
EXECUTIVE VICE PRESIDENT,
CHIEF FINANCIAL OFFICER,
SECRETARY AND TREASURER
DOLLAR FINANCIAL GROUP, INC.
1436 LANCASTER AVENUE, SUITE 210
BERWYN, PENNSYLVANIA 19312-1288
(610) 296-3400
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
WITH A COPY TO:
STEPHEN M. BESEN, ESQ.
WEIL, GOTSHAL & MANGES LLP
767 FIFTH AVENUE
NEW YORK, NEW YORK 10153
(212) 310-8000
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If the Securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
AMOUNT OFFERING AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF TO BE PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER UNIT PRICE(1) FEE(2)
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
10 7/8% Series A Senior Notes
Due 2006..................... $110,000,000 100.000% $110,000,000 $33,334
</TABLE>
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(1) Estimated solely for the purpose of calculating the registration fee.
(2) Calculated pursuant to Rule 457(f)(2).
----------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH +
+SECURITIES AND EXCHANGE COMMISSION BUT HAS NOT YET BECOME EFFECTIVE. THESE +
+SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE +
+TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT +
+CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL +
+THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, +
+SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION +
+UNDER THE SECURITIES LAWS OF ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED DECEMBER 19, 1996
PROSPECTUS
OFFER FOR ALL OUTSTANDING 10 7/8% SENIOR NOTES DUE 2006
IN EXCHANGE FOR 10 7/8% SERIES A SENIOR NOTES DUE 2006, WHICH HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
OF
DOLLAR FINANCIAL GROUP, INC.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME ON ,
1997, UNLESS EXTENDED.
Dollar Financial Group, Inc. (the "Company" or "DFG"), a New York corporation
and a wholly owned subsidiary of DFG Holdings, Inc. ("Holdings"), hereby
offers, upon the terms and subject to the conditions set forth in this
Prospectus and the accompanying Letter of Transmittal (which together
constitute the "Exchange Offer"), to exchange an aggregate principal amount of
up to $110,000,000 of 10 7/8% Series A Senior Notes due 2006 (the "New Notes")
of the Company, which have been registered under the Securities Act of 1933, as
amended (the "Securities Act"), for a like principal amount of the issued and
outstanding 10 7/8% Senior Notes due 2006 (the "Old Notes") of the Company from
the registered holders thereof (the "Holders"). The terms of the New Notes are
identical in all material respects to the Old Notes, except for certain
transfer restrictions relating to the Old Notes. The New Notes will evidence
the same class of debt as the Old Notes and will be issued pursuant to, and
entitled to the benefits of, the Indenture governing the Old Notes
(the "Indenture"). As used herein, the term "Notes" means the Old Notes and the
New Notes, treated as a single class.
DFG will accept for exchange any and all Old Notes validly tendered and not
withdrawn prior to 5:00 P.M., New York City time, on , 1997, unless
extended (as so extended, the "Expiration Date"). Tenders of Old Notes may be
withdrawn at any time prior to the Expiration Date. The Exchange Offer is not
conditioned upon any minimum principal amount of Old Notes being tendered for
exchange pursuant to the Exchange Offer. The Exchange Offer is subject to
certain other customary conditions. See "The Exchange Offer."
On November 15, 1996, the Company issued $110,000,000 principal amount of Old
Notes (the "Offering") pursuant to exemptions from, or in transactions not
subject to, the registration requirements of the Securities Act and applicable
state securities laws.
The Notes will be redeemable at the option of the Company, in whole or in
part, at any time on or after November 15, 2001, at the redemption prices set
forth herein, plus accrued and unpaid interest thereon, if any, to the date of
redemption. In addition, prior to November 15, 1999, the Company may on any one
or more occasions redeem up to 30% of the originally issued principal amount of
Notes at a redemption price equal to 110 7/8% of the principal amount thereof,
plus accrued and unpaid interest thereon, if any, to the date of redemption,
with the net proceeds of an initial public offering of common stock of the
Company or of Holdings (to the extent that the proceeds thereof are contributed
to the Company as common equity); provided that at least 70% of the originally
issued principal amount of Notes remains outstanding immediately after the
occurrence of such redemption. Upon the occurrence of a Change of Control
(as defined), each holder of Notes will have the right to require the Company
to repurchase all or any part of such holder's Notes at an offer price in cash
equal to 101% of the aggregate principal amount thereof, plus accrued and
unpaid interest thereon, if any, to the date of purchase. See "Description of
Notes."
The New Notes will constitute, and the Old Notes currently constitute,
general unsecured obligations of the Company, will rank senior in right of
payment to all subordinated Indebtedness (as defined) of the Company and will
rank pari passu in right of payment with all senior borrowings, including all
borrowings under the New Revolving Credit Facility (as
(continued on next page)
SEE "RISK FACTORS" ON PAGE 13 OF THIS PROSPECTUS FOR A DESCRIPTION OF CERTAIN
RISKS TO BE CONSIDERED BY HOLDERS WHO TENDER THEIR OLD NOTES IN THE EXCHANGE
OFFER.
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
----------
The date of this Prospectus is , 199 .
<PAGE>
(continued from previous page)
defined). The Company's payment obligations under the Notes will be jointly
and severally guaranteed (the "Subsidiary Guarantees") by each of the
Company's current and future domestic subsidiaries (the "Guarantors"). The
Subsidiary Guarantees will rank pari passu in right of payment with all
existing and future senior Indebtedness of the Guarantors, including the
obligations of the Guarantors under the New Revolving Credit Facility and any
successor credit facility. At September 30, 1996, on a pro forma basis after
giving effect to the Exchange Offer and the Acquisitions (as defined), the
aggregate principal amount of Indebtedness (excluding trade payables, other
accrued liabilities and the Notes) of the Company and its subsidiaries would
have been approximately $3.1 million, none of which would have ranked
effectively senior to the Notes. The Indenture limits the ability of the
Company and its subsidiaries to incur additional Indebtedness. However, under
certain circumstances, the Company and its subsidiaries will be permitted to
incur secured Indebtedness, including Indebtedness under the New Revolving
Credit Facility, with respect to which the Notes would be effectively
subordinated to the extent of the assets securing such Indebtedness. See "Risk
Factors--Ranking; Holding Company Structure."
For each Old Note accepted for exchange, the Holder of such Old Note will
receive a New Note having a principal amount equal to that of the surrendered
Old Note. The New Notes will bear interest from the most recent date to which
interest has been paid on the Old Notes or, if no interest has been paid on
the Old Notes, from November 15, 1996. Old Notes accepted for exchange will
cease to accrue interest from and after the date of consummation of the
Exchange Offer. Holders of Old Notes whose Old Notes are accepted for exchange
will not receive any payment in respect of accrued interest on such Old Notes.
The New Notes are being offered hereunder in order to satisfy certain
obligations of the Company contained in the Registration Rights Agreement (as
defined). Based on interpretations by the staff of the Securities and Exchange
Commission (the "SEC") as set forth in no-action letters issued to third
parties, the Company believes that New Notes issued pursuant to the Exchange
Offer in exchange for Old Notes may be offered for resale, resold and
otherwise transferred by Holders thereof (other than any Holder which is an
"affiliate" of the Company within the meaning of Rule 405 under the Securities
Act), without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that such New Notes are acquired in
the ordinary course of such Holders' business and such Holders have no
arrangement with any person to engage in a distribution of such New Notes.
However, the SEC has not considered the Exchange Offer in the context of a no-
action letter and there can be no assurance that the staff of the SEC would
make a similar determination with respect to the Exchange Offer as in such
other circumstances. Each Holder, other than a broker-dealer, must acknowledge
that it is not engaged in, and does not intend to engage in, a distribution of
such New Notes and has no arrangement or understanding to participate in a
distribution of New Notes. Each broker-dealer that receives New Notes for its
own account pursuant to the Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such New Notes. The
Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it
may be amended or supplemented from time to time, may be used by a broker-
dealer in connection with resales of New Notes received in exchange for Old
Notes where such Old Notes were acquired by such broker-dealer as a result of
market-making activities or other trading activities. The Company has agreed
that, for a period of 180 days after the Expiration Date, it will make this
Prospectus available to any broker-dealer for use in connection with any such
resale. See "Plan of Distribution."
The Company will not receive any proceeds from the Exchange Offer. The
Company will pay all the expenses incident to the Exchange Offer. In the event
the Company terminates the Exchange Offer and does not accept for exchange any
Old Notes, the Company will promptly return the Old Notes to the Holders
thereof. See "The Exchange Offer."
There is no existing trading market for the New Notes, and there can be no
assurance regarding the future development of a market for the New Notes. The
Initial Purchasers (as defined) have advised the Company that they currently
intend to make a market in the New Notes. The Initial Purchasers are not
obligated to do so, however, and any market-making with respect to the New
Notes may be discontinued at any time without notice. The Company does not
intend to apply for listing or quotation of the New Notes on any securities
exchange or stock market.
<PAGE>
AVAILABLE INFORMATION
The Company and the Guarantors have filed with the SEC a registration
statement on Form S-4 (herein, together with all amendments and exhibits,
referred to as the "Registration Statement") under the Securities Act with
respect to the New Notes offered hereby. This Prospectus, which forms a part
of the Registration Statement, does not contain all of the information set
forth in the Registration Statement and the exhibits and schedules thereto,
certain parts of which are omitted in accordance with the rules and
regulations of the SEC. For further information with respect to the Company,
the Guarantors and the New Notes offered hereby, reference is made to the
Registration Statement. Any statements made in this Prospectus concerning the
provisions of certain documents are not necessarily complete and, in each
instance, reference is made to the copy of such document filed as an exhibit
to the Registration Statement otherwise filed with the SEC.
As of the date of the effectiveness of the Registration Statement, the
Company and the Guarantors will become subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith will file reports, proxy statements and
other information with the SEC. The Registration Statement, the exhibits
forming a part thereof and the reports, proxy statements and other information
filed by the Company with the SEC in accordance with the Exchange Act may be
inspected, without charge, at the Public Reference Section of the SEC located
at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Regional Offices
of the SEC located at Seven World Trade Center, 13th Floor, New York, New York
10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60601-2511. Copies of all or any portion of the material may be
obtained from the Public Reference Section of the SEC upon payment of the
prescribed fees. The SEC also maintains a Web site at http://www.sec.gov that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the SEC.
The Company will furnish holders of the New Notes offered hereby with annual
reports containing, among other information, audited financial statements
certified by an independent public accounting firm and quarterly reports
containing unaudited financial information for the first three quarters of
each fiscal year. The Company will also furnish such other reports as it may
determine or as may be required by law. In addition, in the event that the
Company is not required to be subject to the reporting requirements of the
Exchange Act in the future, the Company will be required under the Indenture,
pursuant to which the Old Notes were, and the New Notes will be, issued, to
continue to file with the SEC, and to furnish Holders of the New Notes with,
the information, documents and other reports specified in Sections 13 and
15(d) of the Exchange Act.
i
<PAGE>
PROSPECTUS SUMMARY
The following summary should be read in conjunction with, and is qualified in
its entirety by, the more detailed information and financial statements (and
notes thereto) included elsewhere in this Prospectus. Unless the context
indicates otherwise, references in this Prospectus to DFG or the Company are to
Dollar Financial Group, Inc., a New York corporation, its predecessors and
their respective subsidiaries, after giving effect to the transactions
described under "The Acquisitions" (the "Acquisitions"). For convenient
translation purposes, an exchange rate of $1.00 = C$1.362 as of September 30,
1996 has been utilized in connection with the acquisition of National Money
Mart, Inc. ("Money Mart"), a Canadian corporation. For purposes of translating
Money Mart's operating results for the year ended June 30, 1996, an average
exchange rate of $1.00 = C$1.364 has been used; for purposes of translating
Money Mart's operating results for the three months ended September 30, 1996,
an average exchange rate of $1.00=C$1.368 has been used.
THE COMPANY
The Company is a consumer financial services company operating the second
largest check cashing store network in the United States and the largest such
network in Canada. The Company provides a diverse range of consumer financial
products and services primarily consisting of check cashing, money orders,
money transfers, consumer loans, insurance and bill payment. Certain stores
also serve as distribution centers for public assistance benefits and food
stamps under government contracts. On a pro forma basis as of September 30,
1996, the Company has a total network of 426 stores in 14 states, the District
of Columbia and Canada, including 319 Company-owned stores with revenues for
the fiscal year ended June 30, 1996 and for the three months ended September
30, 1996 of $91.7 million and $22.2 million, respectively, and with earnings
before interest, taxes, depreciation and amortization, and loss on store
closings and sales ("Adjusted EBITDA") for the fiscal year ended June 30, 1996
and for the three months ended September 30, 1996 of $21.4 million and $5.0
million, respectively. See "Unaudited Condensed Combined Pro Forma Financial
Statements."
The Company's primary customers are working, lower-income individuals and
families who require basic consumer financial services and are under-served by
traditional retail banking networks. The increased expense and decreased
availability of traditional retail banking services have left an increasing
number of individuals and families (estimated at 20% of the adult population)
without banking relationships. Management believes that growth in the lower-
income segment of the population combined with the decline of traditional
retail banking services provides the Company with significant growth
opportunities.
The check cashing industry in the United States is highly fragmented,
consisting of approximately 5,400 stores as of July 1996, an increase from the
approximately 1,350 national listings in 1986 according to American Business
Information, Inc. In contrast to the domestic market, the Canadian check
cashing industry is significantly less fragmented. Money Mart is the largest
check cashing store network in Canada accounting for 55% of the total number of
check cashing stores. The Company believes it is one of only four U.S. check
cashing store networks that have more than 100 locations, the remaining being
local store networks and single-unit operators. The Company believes that
industry growth has been fueled by several demographic and socioeconomic
trends, including a decline in the number of households with bank deposit
accounts, an increase in the number of low-paying service sector jobs and an
overall increase in the lower-income population. See "Business--Industry
Overview."
The Company's stores currently operate under the following locally
established brand names: ABC Check Cashing, Almost-A-Banc, AnyKind Check
Cashing Centers, C&C Check Cashing, Cash-N-Dash, Check Mart, Chex$Cashed,
Financial Exchange, Money Mart, Quikcash, QwiCash and The Service Centers.
The Company is a wholly owned subsidiary of Holdings. The activities of
Holdings consist solely of its investment in the Company and there are no
differences between the consolidated results of operations of Holdings and
those of the Company. Holdings has no employees or operating activities.
1
<PAGE>
THE ACQUISITIONS
ANYKIND ACQUISITION. On August 8, 1996, the Company purchased all of the
outstanding capital stock of AnyKind Check Cashing Centers, Inc. ("AnyKind")
for an aggregate purchase price of $31.0 million plus initial working capital
of approximately $6.0 million. AnyKind operates 63 check cashing stores in
seven states and the District of Columbia and had revenues for the twelve-month
period ended June 30, 1996 of $22.7 million.
ABC ACQUISITION. On August 28, 1996, the Company purchased certain assets and
liabilities of ABC Check Cashing Inc. ("ABC") for a purchase price of $6.0
million plus initial working capital of approximately $1.5 million. ABC
operates 15 check cashing stores in Cleveland, Ohio and had revenues for the
twelve-month period ended June 30, 1996 of $4.8 million.
MONEY MART ACQUISITION. On November 15, 1996, the Company acquired all of the
outstanding capital stock of Money Mart for approximately $17.7 million (of
which approximately $500,000 was in the form of Holdings Common Stock) plus
initial working capital of approximately $900,000. Money Mart owns 36 check
cashing stores and franchises 107 check cashing stores, all of which operate in
Canada under the "Money Mart" name, and had revenues for the twelve-month
period ended June 30, 1996 of $9.4 million.
CASH-N-DASH ACQUISITION. On November 15, 1996, the Company acquired
substantially all of the assets of Cash-N-Dash Check Cashing, Inc. ("Cash-N-
Dash") for approximately $7.3 million, consisting of $6.0 million in cash (of
which $5.1 million will be payable on January 2, 1997), the issuance to the
seller of $500,000 of Holdings Common Stock and a revenue-based earn-out of up
to $750,000 payable over four years. Cash-N-Dash operates 32 check cashing
stores in northern California under the "Cash-N-Dash" name and had revenues for
the twelve-month period ended June 30, 1996 of $6.2 million.
C&C ACQUISITION. On November 21, 1996, the Company acquired C&C Check
Cashing, Inc. ("C&C") pursuant to a stock purchase agreement for approximately
$3.8 million, consisting of $3.5 million in cash and a revenue-based earn-out
of up to $300,000 payable over three years, plus initial working capital of
approximately $500,000. C&C operates 23 check cashing stores in northern
California under the "C&C Check Cashing" name and had revenues for the twelve-
month period ended June 30, 1996 of $4.8 million.
FINANCING. The acquisitions of AnyKind and ABC were financed through bank
borrowings of $35.0 million under a credit facility then existing (the
"Existing Credit Facility"), the issuance by Holdings of $2.0 million of common
stock ("Holdings Common Stock") to the seller of AnyKind, and the sale of $22.0
million of Holdings Common Stock (the "Equity Transaction") to affiliates of
Weiss, Peck & Greer, L.L.C. ("WPG"), Pegasus Partners, L.P. ("Pegasus") and a
Pegasus affiliate, and General Electric Capital Corporation ("GECC").
Concurrently, with the acquisitions of AnyKind and ABC, the Company increased
and amended its Existing Credit Facility. The cash portion of the purchase
price of the Money Mart, Cash-N-Dash and C&C acquisitions was financed from the
net proceeds of the Offering. The bank borrowings entered into in connection
with the AnyKind and ABC acquisitions were repaid with the net proceeds of the
Offering.
In connection with the Offering, the Company entered into a new revolving
credit facility (the "New Revolving Credit Facility" or the "Credit Agreement")
with certain lenders, including affiliates of the Initial Purchasers, under
which the Company may borrow up to $25.0 million at any one time, if certain
conditions are met. Loans under the New Revolving Credit Facility will
constitute senior secured Indebtedness of the Company and will be guaranteed by
the Company's current and future domestic subsidiaries. There were no
borrowings under the New Revolving Credit Facility or the Existing Credit
Facility as of the date of the consummation of the Offering. See "Description
of Certain Other Indebtedness--New Revolving Credit Facility."
2
<PAGE>
STRATEGY
The Company believes it has the following competitive strengths: (i) store
locations in favorable demographic areas, (ii) high-quality customer service,
(iii) a broad offering of products and services, (iv) economies of scale and
the ability to enter into alliances with strategic partners, (v) management
expertise and (vi) well diversified credit risk. See "Business--Competitive
Strengths."
The Company's business strategy is to capitalize on its competitive strengths
by increasing the revenues and profitability of its existing operations and by
growing through the acquisition of check cashing store networks and the
development of the kiosk store format. See "Business--Strategy." Key elements
of the Company's business strategy include:
MAINTAIN AND INSTILL A CUSTOMER-DRIVEN RETAIL PHILOSOPHY. The Company has
focused on increasing its customer base through a service-oriented approach
designed to meet the needs of working, lower-income individuals and families in
need of basic consumer financial services. The Company offers extended
operating hours in clean, well-lit and convenient store locations to enhance
appeal and stimulate store traffic. The Company uses locally-targeted
advertising, including television and radio, to promote awareness of its
products and its customer service.
INTRODUCE NEW PRODUCTS AND SERVICES. The Company has developed a "one-stop"
shop concept to offer many consumer financial products and services not
otherwise available to its targeted customer base. The Company believes that
its customers enjoy the convenience of those services offered by the Company
other than check cashing. The Company is currently in the process of a
nationwide roll-out of its successful consumer loan program (known as "Cash
'Til Payday") and will continue to expand the product and service offerings of
its newly acquired check cashing store networks. In addition, the Company
intends to seek strategic alliances with other financial institutions and non-
financial organizations, like Western Union, to offer additional products to
its customers.
GROW THROUGH TARGETED ACQUISITIONS AND KIOSK OPENINGS. The Company has grown
significantly since June 1994, primarily through nine acquisitions of an
aggregate of 225 stores. Management will continue to seek opportunistic
acquisitions of well-managed check cashing store networks located in areas with
favorable demographics, including the southeastern and western parts of the
United States. In addition, pursuant to an agreement with The Southland
Corporation, the Company plans to open 19 additional consumer financial service
kiosks that offer check cashing and other products and services. These kiosks,
which will be located in existing 7-Eleven convenience stores, are expected to
be opened in the near future.
CAPITALIZE ON ECONOMIES OF SCALE. The Company is well positioned to take
advantage of the current trend toward consolidation in the check cashing
industry. The Company expects to continue to reduce its per store cost for bad
debt collection, security, armored car services, employee training, management
information systems, and other operating expenses. The Company will continue to
seek cost reductions from its current service suppliers as its check cashing
market share increases through store network acquisitions and kiosk openings.
Furthermore, the Company expects to be able to capitalize on its market
position by developing strategic alliances with other financial institutions
and non-financial organizations.
MANAGE CREDIT RISK. The Company's check cashing service consists of high
volumes of small individual transactions requiring credit risk decisions on
individual checks and customers. On a pro forma basis, for the fiscal year
ended June 30, 1996 and for the three months ended September 30, 1996, the
Company cashed 7.2 million checks and 1.8 million checks, respectively, with an
average face amount of $262 and $281, respectively. The Company actively
manages its customer risk profile and collection efforts in order to maximize
check cashing revenues while maintaining net write-offs within a targeted
range. As a result, management believes that the risk that the Company will
sustain a material credit loss related to a single transaction or series of
transactions is minimal. On a pro forma basis, for the fiscal year ended June
30, 1996 and for the three months ended September 30, 1996, net write-offs as a
percentage of face amount of checks cashed were 0.16% and 0.18% respectively.
3
<PAGE>
MAINTAIN EXISTING BASE OF GOVERNMENT CONTRACTS. The Company intends to
continue to distribute public assistance benefits pursuant to its existing
government contracts. The Company is not, however, planning to further expand
this part of its business and expects government revenue as a percentage of
total revenue to decline in the future.
CORPORATE HISTORY
DFG was established in 1979 by the United States Banknote Company ("USBN") in
order to distribute government benefits on a private basis in the Philadelphia
area. In the mid-1980s, the Company began opening check cashing stores and
government benefits distribution centers in Ohio, California and Michigan. In
May 1990, DFG was acquired from USBN by a private investor group. On June 30,
1994, Holdings was acquired from the previous owner by Messrs. Weiss and
Gayhardt, the Company's Chief Executive Officer and Chief Financial Officer,
respectively, and WPG.
The Company, known until January 1996 as Monetary Management Corporation, was
organized under the laws of the state of New York. The Company's executive
offices are located at 1436 Lancaster Avenue, Suite 210, Berwyn, Pennsylvania
19312-1288, telephone: (610) 296-3400.
4
<PAGE>
THE EXCHANGE OFFER
On November 15, 1996, the Company issued $110,000,000 principal amount of Old
Notes. The Old Notes were sold pursuant to exemptions from, or in transactions
not subject to, the registration requirements of the Securities Act and
applicable state securities laws. Lehman Brothers Inc. and BA Securities, Inc.
(the "Initial Purchasers"), as a condition to their purchase of the Old Notes,
required that the Company agree to commence the Exchange Offer following the
offering of the Old Notes. The New Notes will evidence the same class of debt
as the Old Notes and will be issued pursuant to, and entitled to the benefits
of, the Indenture. As used herein, the term "Notes" means the Old Notes and the
New Notes, treated as a single class.
SECURITIES OFFERED.......... Up to $110,000,000 aggregate principal amount of
the Company's 10 7/8% Series A Senior Notes Due
2006, which have been registered under the
Securities Act (the "New Notes"). The terms of
the New Notes and the Old Notes are identical in
all material respects, except for certain
transfer restrictions relating to the Old Notes.
THE EXCHANGE OFFER.......... The New Notes are being offered in exchange for
a like principal amount of Old Notes. The
issuance of the New Notes is intended to satisfy
obligations of the Company contained in the
Registration Rights Agreement, dated November
15, 1996, among the Company and the Initial
Purchasers (the "Registration Rights
Agreement"). For procedures for tendering the
Old Notes pursuant to the Exchange Offer, see
"The Exchange Offer."
TENDERS, EXPIRATION DATE;
WITHDRAWAL.................. The Exchange Offer will expire at 5:00 P.M., New
York City time, on , 1997, or such later date
and time to which it is extended (as so
extended, the "Expiration Date"). A tender of
Old Notes pursuant to the Exchange Offer may be
withdrawn at any time prior to the Expiration
Date. Any Old Note not accepted for exchange for
any reason will be returned without expense to
the tendering Holder thereof as promptly as
practicable after the expiration or termination
of the Exchange Offer.
FEDERAL INCOME TAX
CONSEQUENCES................ The exchange pursuant to the Exchange Offer
should not result in any income, gain or loss to
the holders or the Company for federal income
tax purposes. See "Certain U.S. Income Tax
Consequences."
USE OF PROCEEDS............. There will be no proceeds to the Company from
the exchange pursuant to the Exchange Offer.
EXCHANGE AGENT.............. Fleet National Bank is serving as the Exchange
Agent in connection with the Exchange Offer.
SHELF REGISTRATION
STATEMENT................... Under certain circumstances described in the
Registration Rights Agreement, certain holders
of Notes (including holders who are not
permitted to participate in the Exchange Offer
or who may not freely resell New Notes received
in the Exchange Offer) may require the Company
to file, and use best efforts to cause to become
effective, a shelf registration statement under
the Securities Act, which would cover resales of
Notes by such holders. See "Description of
Notes--Exchange Offer; Registration Rights."
5
<PAGE>
CONDITIONS TO THE EXCHANGE
OFFER....................... The Exchange Offer is not conditioned on any
minimum principal amount of Old Notes being
tendered for exchange. The Exchange Offer is
subject to certain other customary conditions,
each of which may be waived by the Company. See
"The Exchange Offer--Conditions."
CONSEQUENCES OF FAILURE TO EXCHANGE OLD NOTES
Holders of Old Notes who do not exchange their Old Notes for New Notes
pursuant to the Exchange Offer will continue to be subject to the restrictions
on transfer of such Old Notes as set forth in the legend thereon as a
consequence of the issuance of the Old Notes pursuant to exemptions from, or in
transactions not subject to, the registration requirements of the Securities
Act and applicable state securities laws. In general, the Old Notes may not be
offered or sold, unless registered under the Securities Act, except pursuant to
an exemption from, or in a transaction not subject to, the Securities Act and
applicable state securities laws. The Company does not currently anticipate
that it will register Old Notes under the Securities Act. See "Description of
the Notes--Exchange Offer; Registration Rights." Based on interpretations by
the staff of the SEC, as set forth in no-action letters issued to third
parties, the Company believes that New Notes issued pursuant to the Exchange
Offer in exchange for Old Notes may be offered for resale, resold or otherwise
transferred by holders thereof (other than any holder which is an "affiliate"
of the Company within the meaning of Rule 405 under the Securities Act) without
compliance with the registration and prospectus delivery provisions of the
Securities Act, provided that such New Notes are acquired in the ordinary
course of such holders' business and such holders, other than broker-dealers,
have no arrangement with any person to participate in the distribution of such
New Notes. However, the SEC has not considered the Exchange Offer in the
context of a no-action letter and there can be no assurance that the staff of
the SEC would make a similar determination with respect to the Exchange Offer
as in such other circumstances. Each Holder, other than a broker-dealer, must
acknowledge that it is not engaged in, and does not intend to engage in, a
distribution of such New Notes and has no arrangement or understanding to
participate in a distribution of New Notes. Each broker-dealer that receives
New Notes for its own account in exchange for Old Notes must acknowledge that
such Old Notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities and that it will deliver a prospectus in
connection with any resale of such New Notes. See "Plan of Distribution." In
addition, to comply with the securities laws of certain jurisdictions, it may
be necessary to qualify for sale or register thereunder the New Notes prior to
offering or selling such New Notes. The Company has agreed, pursuant to the
Registration Rights Agreement, subject to certain limitations specified
therein, to register or qualify the New Notes for offer or sale under the
securities laws of such jurisdictions as any holder reasonably requests in
writing. Unless a holder so requests, the Company does not intend to register
or qualify the sale of the New Notes in any such jurisdictions. See "Risk
Factors-- Consequences of Failure to Exchange" and "The Exchange Offer--
Consequences of Exchanging Old Notes."
6
<PAGE>
SUMMARY DESCRIPTION OF THE NEW NOTES
The terms of the New Notes and the Old Notes are identical in all material
respects, except for certain transfer restrictions relating to the Old Notes.
The New Notes will bear interest from the most recent date to which interest
has been paid on the Old Notes or, if no interest has been paid on the Old
Notes, from November 15, 1996. Accordingly, registered holders of New Notes on
the relevant record date for the first interest payment date following the
consummation of the Exchange Offer will receive interest accruing from the most
recent date to which interest has been paid on the Old Notes or, if no interest
has been paid, from November 15, 1996. Old Notes accepted for exchange will
cease to accrue interest from and after the date of consummation of the
Exchange Officer. Holders whose Old Notes are accepted for exchange will not
receive any payment in respect of interest on such Old Notes otherwise payable
on any interest payment date the record date for which occurs on or after
consummation of the Exchange Offer.
SECURITIES OFFERED ......... $110,000,000 aggregate principal amount of 10
7/8% Series A Senior Notes due 2006.
ISSUER ..................... Dollar Financial Group, Inc.
MATURITY DATE .............. November 15, 2006.
INTEREST PAYMENT DATES ..... May 15 and November 15, commencing May 15, 1997.
MANDATORY REDEMPTION ....... None.
OPTIONAL REDEMPTION ........ The Notes will be redeemable at the option of
the Company, in whole or in part, at any time on
or after November 15, 2001 at the redemption
prices set forth herein, plus accrued and unpaid
interest thereon, if any, to the date of
redemption. In addition, prior to November 15,
1999, the Company may on any one or more
occasions redeem up to 30% of the originally
issued principal amount of Notes at a redemption
price equal to 110 7/8% of the principal amount
thereof, plus accrued and unpaid interest
thereon, if any, to the date of redemption, with
the net proceeds of an initial public offering
of common stock of the Company or of Holdings
(to the extent that the proceeds thereof are
contributed to the Company as common equity);
provided that at least 70% of the originally
issued principal amount of Notes remains
outstanding immediately after the occurrence of
such redemption. See "Description of Notes--
Optional Redemption."
CHANGE OF CONTROL .......... Upon the occurrence of a Change of Control, each
holder of Notes will have the right to require
the Company to repurchase all or any part of
such holder's Notes at an offer price in cash
equal to 101% of the aggregate principal amount
thereof, plus accrued and unpaid interest
thereon, if any, to the date of purchase. See
"Description of Notes--Repurchase at the Option
of Holders--Change of Control."
RANKING .................... The Old Notes currently are, and the New Notes
will be, general unsecured obligations of the
Company, rank senior in right of payment to all
subordinated Indebtedness of the Company and
rank pari passu in right of payment with all
senior borrowings,
7
<PAGE>
including all borrowings under the New Revolving
Credit Facility. At September 30, 1996, on a pro
forma basis after giving effect to the Offering
and the Acquisitions, the aggregate principal
amount of Indebtedness (excluding trade
payables, other accrued liabilities and the
Notes) of the Company and its subsidiaries would
have been approximately $3.1 million, none of
which would have ranked effectively senior to
the Notes. The Indenture limits the ability of
the Company and its subsidiaries to incur
additional Indebtedness. However, under certain
circumstances, the Company and its subsidiaries
will be permitted to incur additional secured
Indebtedness, including Indebtedness under the
New Revolving Credit Facility, with respect to
which the Notes would be effectively
subordinated to the extent of the assets
securing such Indebtedness. See "Risk Factors--
Ranking; Holding Company Structure."
SUBSIDIARY GUARANTEES ...... The Company's payment obligations under the Old
Notes are, and under the New Notes will be,
jointly and severally guaranteed (the
"Subsidiary Guarantees") by each of the
Company's existing and future domestic
subsidiaries (the "Guarantors"). The Subsidiary
Guarantees rank pari passu in right of payment
with all existing and future senior Indebtedness
of the Guarantors, including the obligations of
the Guarantors under the New Revolving Credit
Facility and any successor credit facility. See
"Description of Notes--Subsidiary Guarantees."
CERTAIN COVENANTS .......... The Indenture contains certain covenants that,
among other things, limit the ability of the
Company and its subsidiaries to (i) incur
additional Indebtedness and issue preferred
stock, (ii) pay dividends or make other
distributions, (iii) repurchase Equity Interests
(as defined) or subordinated Indebtedness, (iv)
engage in sale and leaseback transactions, (v)
create certain liens, (vi) enter into certain
transactions with affiliates, (vii) sell assets
of the Company or its subsidiaries, (viii) issue
or sell Equity Interests of the Company's
subsidiaries or (ix) enter into certain mergers
and consolidations. In addition, under certain
circumstances, the Company is required to offer
to purchase the Notes at a price equal to 100%
of the principal amount thereof, plus accrued
and unpaid interest thereon, if any, to the date
of purchase, with the proceeds of certain Asset
Sales (as defined). See "Description of Notes--
Certain Covenants."
EXCHANGE OFFER;
REGISTRATION RIGHTS ........ Pursuant to a Registration Rights Agreement (the
"Registration Rights Agreement") between the
Company and the Initial Purchasers, the Company
agreed to file an exchange offer registration
statement with respect to the Exchange Offer.
The Registration Statement of which this
Prospectus is a part constitutes the exchange
offer registration statement referred to
therein. If, among other things, any holder of
the Transfer Restricted Securities (as defined)
notifies the Company that (A) it
8
<PAGE>
is prohibited by law or Commission policy from
participating in the Exchange Offer, (B) that it
may not resell the New Notes acquired by it in
the Exchange Offer to the public without
delivering a prospectus and the prospectus
contained in the Exchange Offer Registration
Statement is not appropriate or available for
such resales or (C) that it is a broker-dealer
and holds Notes acquired directly from the
Company or an affiliate of the Company, the
Company will be required to provide a shelf
registration statement (the "Shelf Registration
Statement") to cover resales of the Notes by the
holders thereof. If the Company fails to satisfy
these registration obligations, it will be
required to pay certain increases in the
interest rate on the Old Notes as provided in
the Registration Rights Agreement.
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION
WITH AN INVESTMENT IN THE NOTES, SEE "RISK FACTORS" BEGINNING ON PAGE 13.
9
<PAGE>
SUMMARY HISTORICAL AND PRO FORMA FINANCIAL AND OPERATING DATA
The following table sets forth summary consolidated historical and unaudited
condensed combined pro forma financial and other data for the periods
indicated. The following summary historical statement of operations data and
balance sheet data are derived from the consolidated financial statements of
the Company (formerly Monetary Management Corporation) as of December 31, 1991,
1992, 1993 and for the years then ended, as of June 30, 1994 and for the six
months then ended, and as of June 30, 1995 and 1996 and for the years then
ended which have been audited by Ernst & Young LLP, independent auditors. The
summary financial and other data for the three months ended September 30, 1995
and 1996 and for the six months ended June 30, 1993 have been derived from
unaudited interim consolidated financial statements of the Company and, in the
opinion of management, include all adjustments (consisting of normal, recurring
and other adjustments) necessary for a fair presentation of such information
and are not necessarily indicative of the results to be expected for the full
year. This data should be read in conjunction with the consolidated financial
statements and related notes for these periods and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included elsewhere
in this Prospectus. The unaudited condensed combined pro forma income statement
data and other operating data give effect to the Acquisitions and the Offering
and the application of the net proceeds therefrom as if they had occurred at
the beginning of the period presented. The unaudited condensed combined pro
forma balance sheet data give effect to the Acquisitions and the Offering and
the application of the net proceeds therefrom as if they had occurred at the
respective balance sheet date. The condensed combined pro forma financial data
are unaudited and do not purport to represent what the Company's financial
position or results of operations would actually have been if the Acquisitions
and the Offering had occurred on the dates specified and do not project the
Company's financial position or results of operations for any future periods.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations" included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
PREDECESSOR COMPANY(1)
-------------------------------------------
SIX MONTHS
ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
------------------------- ----------------
1991 1992(2) 1993 1993 1994
------- ------- ------- ------- -------
(DOLLARS IN THOUSANDS, EXCEPT CHECK CASHING DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Revenues................ $19,119 $25,405 $28,734 $14,373 $14,676
Store and regional
expenses:
Salaries and benefits.. 6,150 7,811 8,354 4,242 4,266
Occupancy.............. 1,796 2,504 2,578 1,317 1,313
Depreciation........... 809 1,140 1,102 579 483
Other.................. 5,418 7,347 8,139 4,000 4,132
------- ------- ------- ------- -------
Total store and regional
expenses............... 14,173 18,802 20,173 10,138 10,194
Corporate expenses...... 2,067 3,133 4,414 2,358 2,321
Loss (gain) on store
closings and sales..... 171 283 110 -- 36
Other depreciation and
amortization........... 1,763 2,231 1,183 752 319
Recapitalization costs.. 1,432 -- -- -- --
Interest expense........ 2,554 1,744 1,597 847 721
------- ------- ------- ------- -------
Income (loss) before
taxes.................. (3,041) (788) 1,257 278 1,085
Income tax provision
(benefit).............. 33 172 205 78 174
------- ------- ------- ------- -------
Net income (loss)....... $(3,074) $ (960) $ 1,052 $ 200 $ 911
======= ======= ======= ======= =======
Ratio of earnings to
fixed charges(8)....... -- -- 1.6x 1.2x 2.0x
OPERATING AND OTHER
DATA:
Adjusted EBITDA(9)...... $ 2,256 $ 4,610 $ 5,249 $ 2,456 $ 2,644
Adjusted EBITDA
margin(9).............. 11.8% 18.1% 18.3% 17.1% 18.0%
Stores in operation at
end of period.......... 85 107 108 108 109
Pro forma ratio of
Adjusted EBITDA to cash
interest expense.......
Pro forma ratio of total
indebtedness to
Adjusted EBITDA........
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
SUCCESSOR COMPANY(1)
-------------------------------------------------------
THREE MONTHS ENDED
YEAR ENDED JUNE 30, SEPTEMBER 30,
--------------------------- ---------------------------
PRO FORMA PRO FORMA
1995(3) 1996(4) 1996(6) 1995(4) 1996(5) 1996(7)
------- ------- --------- ------- ------- ---------
(DOLLARS IN THOUSANDS, EXCEPT CHECK CASHING DATA)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Revenues................ $34,834 $42,430 $91,730 $9,741 $13,645 $22,164
Store and regional
expenses:
Salaries and benefits.. 11,042 13,975 28,689 3,245 4,691 6,946
Occupancy.............. 3,122 4,031 9,660 953 1,395 2,383
Depreciation........... 894 893 1,882 246 243 441
Other.................. 9,577 11,709 23,215 2,772 3,648 5,435
------- ------- ------- ------ ------- -------
Total store and regional
expenses............... 24,635 30,608 63,446 7,216 9,977 15,205
Corporate expenses...... 4,414 5,360 8,765 1,309 1,371 2,414
Loss (gain) on store
closings and sales..... 93 4,501 4,504 21 (18) (18)
Other depreciation and
amortization........... 1,630 1,858 4,721 422 659 1,184
Recapitalization costs.. -- -- -- -- -- --
Interest expense........ 2,480 3,385 12,790 759 1,358 3,198
------- ------- ------- ------ ------- -------
Income (loss) before
taxes.................. 1,582 (3,282) (2,496) 14 298 181
Income tax provision
(benefit).............. 1,022 (1,214) (226) 71 246 292
------- ------- ------- ------ ------- -------
Net income (loss)....... $ 560 $(2,068) $(2,270) $ (57) $ 52 (111)
======= ======= ======= ====== ======= =======
Ratio of earnings to
fixed charges(8)....... 1.5x -- -- 1.0x 1.2x 1.1x
OPERATING AND OTHER
DATA:
Adjusted EBITDA(9)...... $ 6,679 $ 7,355 $21,401 $1,462 $ 2,540 $ 4,986
Adjusted EBITDA
margin(9).............. 19.2% 17.3% 23.3% 15.0% 18.6% 22.5%
Stores in operation at
end of period.......... 150 154 426 166 228 426
Pro forma ratio of
Adjusted EBITDA to cash
interest expense....... 1.73x 1.61x
Pro forma ratio of total
indebtedness to
Adjusted EBITDA........ 5.28x
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
PREDECESSOR COMPANY(1)
--------------------------------------------------------------------
SIX MONTHS
ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
---------------------------------------- --------------------------
1991 1992(2) 1993 1993 1994
------------ ------------ ------------ ------------ ------------
(DOLLARS IN THOUSANDS, EXCEPT CHECK CASHING DATA)
<S> <C> <C> <C> <C> <C>
CHECK CASHING
DATA:
Face amount of
checks cashed.. $231,173,000 $267,009,000 $307,523,000 $157,219,000 $160,681,000
Number of checks
cashed......... 933,610 1,202,454 1,307,768 648,549 662,855
Average face
amount per
check cashed... $ 247.61 $ 222.05 $ 235.15 $ 242.42 $ 242.41
Average fee per
check.......... $ 6.27 $ 6.59 $ 6.53 $ 6.69 $ 6.78
Average fee as a
% of face
amount......... 2.53% 2.97% 2.78% 2.76% 2.80%
BALANCE SHEET
DATA (AT END OF
PERIOD):
Cash............ $ 9,082 $ 10,380 $ 10,974 $ 8,916 $ 11,023
Total assets.... 31,523 29,379 29,681 28,013 28,607
Total
indebtedness... 17,073 16,969 16,639 16,634 15,832
Shareholder's
equity......... 7,380 5,974 5,708 6,238 6,309
<CAPTION>
SUCCESSOR COMPANY(1)
-----------------------------------------------------------------------------------
THREE MONTHS
ENDED
YEAR ENDED JUNE 30, SEPTEMBER 30,
----------------------------------------- ----------------------------------------
PRO FORMA PRO FORMA
1995(3) 1996(4) 1996(6) 1995(4) 1996(5) 1996(7)
----------- ------------ -------------- ------------ ------------ ------------
(DOLLARS IN THOUSANDS, EXCEPT CHECK CASHING DATA)
<S> <C> <C> <C> <C> <C> <C>
CHECK CASHING
DATA:
Face amount of
checks cashed.. $510,771,000 $728,123,000 $1,893,885,000 $166,984,000 $313,385,000 $507,700,000
Number of checks
cashed......... 2,132,006 3,051,037 7,236,000 686,000 1,090,000 1,810,000
Average face
amount per
check cashed... $ 239.57 $ 238.65 $ 261.73 $ 243.42 $ 287.51 $ 280.50
Average fee per
check.......... $ 6.45 $ 6.65 $ 7.65 $ 6.26 $ 7.10 $ 7.30
Average fee as a
% of face
amount......... 2.69% 2.79% 2.93% 2.57% 2.47% 2.60%
BALANCE SHEET
DATA (AT END OF
PERIOD):
Cash............ $ 19,778 $ 22,545 $ 44,100 $ 25,614 $ 41,784 $ 48,727
Total assets.... 60,687 67,444 161,008 72,945 127,390 165,053
Total
indebtedness... 35,496 42,530 113,005 45,490 74,423 113,068
Shareholder's
equity......... 15,775 13,707 36,222 15,718 37,411 36,369
</TABLE>
- -------
(1) On June 30, 1994, MMH Transit Co. ("MMHT"), a Delaware corporation, was
formed principally by two private equity funds sponsored by WPG, through
the issuance of 15,000 shares of common stock at $1,010.67 per share. Total
consideration was $15.2 million. Pursuant to an Agreement and Plan of
Merger dated as of June 30, 1994 among MMHT, Bear Stearns Acquisition XII,
Inc. (the predecessor majority shareholder of Holdings) and Holdings,
Holdings and MMHT consummated a merger whereby MMHT acquired all of the
outstanding common stock and warrants of Holdings for $10.5 million. MMHT
was merged with and into Holdings, and the separate corporate existence of
MMHT ceased and Holdings was the surviving corporation in the merger. The
acquisition of Holdings on June 30, 1994 was accounted for under the
purchase method of accounting and, accordingly, the acquisition cost was
allocated to the fair value of net assets acquired. The cost of acquiring
Holdings has, in turn, been allocated to the Company and used to establish
a new accounting basis in the Company's financial statements. Approximately
$20.9 million, the acquisition cost in excess of the fair market value of
the net assets acquired, was recorded as goodwill. References to the
Successor refer to the Company for the periods subsequent to the
acquisition on June 30, 1994 and references to the Predecessor refer to the
Company for the periods prior to the acquisition on June 30, 1994. Prior to
the acquisition, the Company maintained a December 31 fiscal year.
Effective with the acquisition, the Company changed its fiscal year to June
30.
(2) In February 1992, the Company acquired certain assets of Almost-A-Banc,
Inc. for $1.8 million. The acquisition was accounted for under the purchase
method of accounting and, accordingly, the operating results of Almost-A-
Banc, Inc. are included from the date of acquisition.
(3) On September 29, 1994, the Company purchased substantially all of the
assets of the check cashing operations of a company operating under the
name "Check Mart, Inc." with 24 locations in Washington, Utah, California,
and New Mexico. Total consideration for the purchase was $7.8 million,
which was funded by borrowings under the Existing Credit Facility and a
$720,000 subordinated note payable. Results of operations and cash flows
for the period from September 30, 1994 to June 30, 1995 and for the year
ended June 30, 1996 are included in the Company's consolidated financial
statements. Approximately $6.7 million, the acquisition cost in excess of
the fair market value of the net assets acquired, was recorded as goodwill.
(4) On September 18, 1995, the Company purchased all of the outstanding stock
or certain assets of several entities which operate 19 check cashing stores
in California, Arizona, Ohio and Wisconsin and operate under the name
"Chex$Cashed." Total consideration for the purchase was $7.4 million, which
was funded through borrowings under the Existing Credit Facility.
Approximately $6.7 million, the excess of the purchase price over the fair
market value of identifiable net assets, was recorded as goodwill.
(5) On August 8, 1996, the Company purchased all of the outstanding common
stock of AnyKind Check Cashing Centers, Inc. which operates 63 check
cashing stores in seven states and the District of Columbia. Total
consideration for the purchase was $31.0 million plus initial working
capital of approximately $6.0 million. On August 28, 1996, the Company
acquired the assets associated with the operations of "ABC Check Cashing"
for $6.0 million in cash. ABC operates approximately 15 check cashing
centers within the Cleveland, Ohio area. The acquisitions were accounted
for under the purchase method of accounting. Approximately $36.5 million,
the acquisition cost in excess of the fair market value of the net assets
acquired, was recorded as goodwill. The acquisitions were funded through
borrowings under the Existing Credit Facility and issuance of Holdings
Common Stock.
(6) Assumes that the acquisitions of Chex$Cashed and the Acquisitions occurred
on July 1, 1995, and gives pro forma effect to the consummation of the
Offering and the application of the estimated net proceeds therefrom as if
each had occurred on July 1, 1995.
(7) Assumes that the Acquisitions occurred on July 1, 1996, and gives pro forma
effect to the consummation of the Offering and the application of the net
proceeds therefrom as if it had occurred on July 1, 1996. In connection
with the Offering, the Company wrote off deferred financing costs of
approximately $2.0 million (after tax) related to the Existing Credit
Facility. This extraordinary write-off is reflected in pro forma
Shareholders' Equity at September 30, 1996.
(8) For purposes of the ratio of earnings to fixed charges, (i) earnings
include earnings before income taxes and fixed charges and (ii) fixed
charges consist of interest on all indebtedness, amortization of deferred
financing costs and that portion of rental expense (one-third) that the
Company believes to be representative of interest. The Company's earnings
were insufficient to cover fixed charges by $3.0 million and $788,000 for
the years ended December 31, 1991 and 1992, respectively, by $3.3 million
for the year ended June 30, 1996 and by $2.5 million for the year ended
June 30, 1996 on a pro forma basis.
(9) Adjusted EBITDA is earnings before interest, taxes, depreciation,
amortization, and loss on store closings and sales. Adjusted EBITDA does
not represent cash flows as defined by generally accepted accounting
principles and does not necessarily indicate that cash flows are sufficient
to fund all of the Company's cash needs. Adjusted EBITDA should not be
considered in isolation or as a substitute for net income (loss), cash
flows from operating activities or other measures of liquidity determined
in accordance with generally accepted accounting principles. The Adjusted
EBITDA margin represents Adjusted EBITDA as a percentage of revenues.
12
<PAGE>
RISK FACTORS
Prior to making an investment in the Notes offered hereby, prospective
purchasers should carefully consider all of the information contained in this
Prospectus and, in particular, should evaluate the following risk factors.
Certain statements in this Prospectus that are not factual constitute
"forward-looking statements." Such forward-looking statements involve known
and unknown risks, uncertainties and other factors that may cause the actual
results of the Company to be materially different from results expressed or
implied by such forward-looking statements. Such risks, uncertainties and
other factors include, but are not limited to, the following:
SUBSTANTIAL LEVERAGE; ABILITY TO SERVICE OUTSTANDING INDEBTEDNESS
The Company is highly leveraged. At September 30, 1996, on a pro forma basis
after giving effect to the Acquisitions and the Offering, the Company's total
Indebtedness would have been $113.1 million and its total shareholder's equity
would have been $36.4 million. The Company's fixed charges in the year ended
June 30, 1996, on a pro forma basis after giving effect to the Acquisitions
and the Offering, would have exceeded its earnings in that year by $2.5
million. The Company's operating results have been and will continue to be
affected by significant fixed charges related to its Indebtedness. The New
Revolving Credit Facility contains significant financial and operating
covenants, including, among other things, maintenance of certain financial
ratios and restrictions on the ability of the Company to incur Indebtedness,
make capital expenditures, create or permit liens, pay dividends or take
certain other corporate actions. In addition, a breach of certain covenants
under the New Revolving Credit Facility could result in the acceleration of
the Company's payment obligations thereunder. See "Capitalization," "Unaudited
Condensed Combined Pro Forma Financial Statements" and "Description of Certain
Other Indebtedness--New Revolving Credit Facility."
The Company's ability to make scheduled payments of the principal of, or to
pay the interest on, or to refinance, its Indebtedness (including the Notes)
will depend upon its future performance, which, to a certain extent, is
subject to general economic, financial, competitive, legislative, regulatory
and other factors beyond its control. Management believes that, based on
current levels of operations and anticipated improvements in operating
results, cash flows from operations and borrowings available under the New
Revolving Credit Facility will enable the Company to fund its liquidity and
capital expenditure requirements for the forseeable future, including
scheduled payments of interest on the Notes and payments of interest and
principal on the Company's other Indebtedness. There can be no assurance,
however, that the Company's business will generate sufficient cash flow from
operations or that future borrowings will be available under the New Revolving
Credit Facility in an amount sufficient to enable the Company to service its
Indebtedness, including the Notes, or to make anticipated capital
expenditures. It may be necessary for the Company to refinance all or a
portion of the principal of the Notes on or prior to maturity, under certain
circumstances, but there can be no assurance that the Company will be able to
effect such refinancing on commercially reasonable terms or at all. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."
The degree to which the Company is leveraged could have material adverse
effects on the Company and the holders of Notes, including, but not limited
to, the following: (i) the Company's ability to obtain additional financing in
the future for acquisitions, working capital, capital expenditures, general
corporate or other purposes may be impaired, (ii) a substantial portion of the
Company's cash flow from operations will be dedicated to debt service and
unavailable for other purposes, (iii) certain of the Company's borrowings may
be at variable rates of interest, which could result in higher interest
expense in the event of increases in interest rates and (iv) the Company is
subject to a variety of restrictive covenants, the failure to comply with
which could result in events of default that, if not cured or waived, could
restrict the Company's ability to make payments of principal of, and interest
on, the Notes. See "Description of Certain Other Indebtedness--New Revolving
Credit Facility" and "Description of Notes."
RANKING; HOLDING COMPANY STRUCTURE
The Old Notes are, and the New Notes will be, general unsecured obligations
of the Company, rank senior in right of payment to all subordinated
Indebtedness of the Company and rank pari passu in right of payment
13
<PAGE>
with all senior borrowings, including all borrowings under the New Revolving
Credit Facility. The Subsidiary Guarantees rank pari passu in right of payment
with all existing and future senior Indebtedness of the Guarantors, including
the obligations of the Guarantors under the New Revolving Credit Facility and
any successor credit facility. At September 30, 1996, on a pro forma basis
after giving effect to the Offering and the Acquisitions, the aggregate
principal amount of Indebtedness (excluding trade payables, other accrued
liabilities and the Notes) of the Company and its subsidiaries would have been
approximately $3.1 million, none of which would have ranked effectively senior
to the Notes. The Indenture limits the ability of the Company and its
subsidiaries to incur additional Indebtedness. However, under certain
circumstances, the Company and its subsidiaries will be permitted to incur
secured Indebtedness, including Indebtedness under the New Revolving Credit
Facility. The New Revolving Credit Facility is secured by substantially all of
the assets and property of the Company, including the capital stock of the
Company's subsidiaries. Although the Notes constitute senior obligations of
the Company, the holders of secured Indebtedness would have a prior claim to
the assets securing such Indebtedness. In the event of any insolvency
proceeding involving the Company, the obligations of the Company under the
Notes would be effectively subordinated to any secured Indebtedness of the
Company.
The Company is a holding company that conducts substantially all of its
business operations through its subsidiaries. Consequently, the Company's
operating cash flow and its ability to service its Indebtedness, including the
Notes, is dependent upon the cash flow of its subsidiaries and the payment of
funds by such subsidiaries to the Company in the form of loans, dividends or
otherwise. The Company's subsidiaries are separate and distinct legal entities
apart from the Company and each domestic subsidiary has agreed to guarantee
payment of the Notes on a senior basis. However, the Company's current and
future Canadian subsidiaries, if any, will not be Guarantors. Pro forma for
the Acquisitions, approximately 10.3% and 11.7% of the Company's consolidated
revenues would have been attributable to the operations of its Canadian
subsidiaries for the year ended June 30, 1996 and for the three months ended
September 30, 1996, respectively. The Indenture contains financial and
restrictive covenants that limit the ability of the Company and its
subsidiaries to, among other things, borrow additional funds, dispose of
assets or pay cash dividends. In addition, the New Revolving Credit Facility
is secured by substantially all of the property, assets and capital stock of
the Company's subsidiaries, including the Guarantors. See "Description of
Notes--Certain Covenants" and "Description of Certain Other Indebtedness--New
Revolving Credit Facility."
RECENT RAPID GROWTH; ABILITY TO IMPLEMENT AND MANAGE GROWTH STRATEGY
The Company's expansion strategy, which contemplates the acquisition of
existing check cashing store networks and the development of kiosks within
convenience store chains, is subject to significant risks. The Company's
continued growth is dependent upon a number of factors, including the ability
to hire, train and retain an adequate number of experienced management
employees, the availability of adequate financing for its expansion
activities, the ability to identify attractive acquisition candidates and
acquire such businesses on economically acceptable terms, the ability to
obtain any government permits and licenses that may be required, and other
factors, some of which are beyond the control of the Company. Expansion beyond
the geographic areas where the stores are presently located will increase
demands on the Company's management. There can be no assurance that future
acquisitions will not have a material adverse effect on the Company's
financial condition and results of operations, particularly in the fiscal
quarters immediately following the consummation of such transactions while the
operations of the acquired chains are being integrated into the Company's
operations. Any significant problems with integrating the new stores, or the
failure of the acquired chains to achieve anticipated performance levels,
could adversely affect the Company's results of operations and expansion
plans. In this regard, in February 1995, the Company acquired 19 stores, nine
of which were subsequently closed and ten of which were divested at a loss.
See "Management's Discussion and Analysis of Financial Condition and Results
of Operations--General--Results of Operations." In addition, there can be no
assurance that the Company will be successful in its effort to reach
agreements with convenience store chains which will enable the Company to
install kiosks in these locations or that such kiosks will be successful. See
"Business--Strategy."
COMPETITION
The check cashing industry is highly fragmented and highly competitive. In
addition, the Company believes that the check cashing market will become more
competitive as the industry consolidates. In addition to other
14
<PAGE>
check cashing stores in the U.S. and Canada, the Company competes with banks
and other financial services entities and retail businesses that cash checks,
sell money orders, provide money transfer services or offer other products and
services offered by the Company. Some of the Company's competitors have larger
and more established customer bases and substantially greater financial,
marketing and other resources than the Company. See "Business--Competition."
TERMINATION OF GOVERNMENT CONTRACTS
The Company provides support and operating services for the distribution of
public assistance benefits through government contracts in several states. On
a historical basis, revenues from government services accounted for
approximately 37.6% and 27.0% of the Company's total revenues for the year
ended June 30, 1996 and three months ended September 30, 1996, respectively.
Generally, each of these government contracts is subject to termination by the
respective governmental agency upon anywhere from 30 days to 270 days' notice.
Termination of such government contracts or the failure of one or more such
governmental bodies to renew their contracts with the Company could have a
material adverse effect upon the Company's business. See "Business--Products
and Services--Retail Stores Division--Government Benefits Distribution."
TECHNOLOGICAL OBSOLESCENCE
The Company derives the majority of its revenues from fees associated with
the cashing of payroll, government and personal checks. Recently, there has
been increasing penetration of electronic banking services into the check
cashing industry, including direct deposit of payroll checks and electronic
transfer of government benefits. To the extent that checks are replaced with
such electronic transfers, demand for the Company's services could decrease,
which could have a material adverse effect upon the Company's business,
financial condition and results of operations.
SEASONALITY
The Company's business is seasonal due to the impact of several tax-related
services, including cashing tax refund checks, making electronic tax filings
and processing applications for refund anticipation loans. Historically, the
Company has generally experienced its highest revenues and earnings during its
third fiscal quarter ending March 31 when revenues from these tax-related
services peak. Due to the seasonality of the Company's business, therefore,
results of operations for any fiscal quarter are not necessarily indicative of
the results that may be achieved for the full fiscal year. In addition to
seasonal fluctuations, quarterly results of operations depend significantly
upon the timing and amount of revenues and expenses associated with the
addition of new stores. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Seasonality."
GOVERNMENT REGULATION
The Company's business is subject to numerous state and certain federal laws
and regulations, including those governing consumer protection and lending
practices (such as truth in lending and usury laws), which are subject to
change. An adverse change in or interpretation of existing laws or
regulations, the promulgation of any new laws or regulations, or the failure
to comply with any of such laws and regulations could have an adverse effect
on the Company's business and its financial condition.
Check cashing fees are regulated at the state level, if at all. The Company
is currently subject to fee regulation in two states, Ohio and California,
where regulations set maximum fees for cashing various types of checks in an
attempt to prevent usurious pricing practices. Several other states into which
the Company may expand also impose maximum fees for check cashing. There are
currently no federal regulations governing check cashing fees.
In addition to the regulation of fees, the Company is also subject to state
prompt remittance statutes in California and Maryland which require the
reporting of certain currency transactions. Any additional regulations
15
<PAGE>
in states in which the Company now operates or will operate in the future
could decrease the amount of time that the Company may hold funds collected
from the sale of money orders. Such regulation would have the effect of
limiting the number of days or "float" which the Company has use of the money
from the sale of such money orders, thereby increasing the Company's need for
working capital.
In Canada, the federal government does not directly regulate the check
cashing industry nor do provincial governments impose any regulations specific
to the industry. The exception is in the Province of Quebec, where check
cashing stores are not permitted to charge a fee to cash government checks.
The adoption of check cashing fee regulations and prompt remittance statutes
in additional jurisdictions or the reduction of maximum allowable fees in the
jurisdictions currently regulating check cashing could have a material adverse
effect on the Company's business and could restrict the ability of the Company
to expand its operations into certain states. As the Company develops new
products and services in the insurance and consumer finance areas, it may
become subject to additional federal and state regulations governing those
areas.
In addition, there can be no assurance that the Company will not be
materially adversely affected by legislation or regulations enacted in the
future or that amendments to existing regulations will not restrict the
ability of the Company to continue its current methods of operations or to
expand its operations. See "Business--Regulation."
INHERENT RISKS OF CASH BUSINESS
Since the Company's business requires it to maintain a significant supply of
cash in each of its stores, the Company is subject to the risk of cash
shortages resulting from employee errors and from theft. Although the Company
has implemented various programs to reduce these risks, has insurance coverage
for theft and provides security for its employees and facilities, there can be
no assurance that these risks will be eliminated. See "Business--Store
Operations--Security." For the year ended June 30, 1996 and the three months
ended September 30, 1996, cash shortages at the store level totaled 0.7% and
0.7% of revenues, respectively. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--General--Results of
Operations."
DEPENDENCE ON KEY PERSONNEL
The success of the Company's business is highly dependent upon the members
of the senior management of the Company. The loss of the services of one or
more of them could have a material adverse effect upon the Company's business
and development. The Company has employment agreements with Jeffrey Weiss, its
Chairman, Chief Executive Officer and President, and Donald Gayhardt, its
Executive Vice President and Chief Financial Officer. These agreements, which
continue until June 30, 1999, each have a non-competition provision which
extends for a period of two years in the case of Mr. Weiss and a period of one
year in the case of Mr. Gayhardt following termination of the respective
agreement. The Company's continued growth also will depend upon its ability to
attract and retain additional skilled management personnel. See "Management--
Employment Agreements."
CONTROL OF THE COMPANY
As of September 30, 1996, approximately 59.5% of Holdings Common Stock was
beneficially owned by affiliates of WPG. The holders of a majority of Holdings
Common Stock can, indirectly, elect all of the directors of the Company and
approve or disapprove certain fundamental corporate transactions, including
mergers and the sale of substantially all of the Company's assets. By reason
of such stock ownership, WPG may have interests which could be in conflict
with the holders of the Notes. In addition, pursuant to a Shareholders
Agreement entered into on August 8, 1996, certain of Holdings' shareholders
have veto rights over significant corporate transactions. See "Management" and
"Certain Relationships and Related Transactions--Shareholders Agreement."
16
<PAGE>
CHANGE OF CONTROL
The Indenture provides that, upon the occurrence of any Change of Control,
the Company will be required to make a Change of Control Offer (as defined) to
purchase all of the Notes issued and then outstanding under the Indenture at a
purchase price equal to 101% of the principal amount thereof, plus accrued and
unpaid interest, if any, to the date of purchase. The New Revolving Credit
Facility prohibits the Company from purchasing any Notes prior to their stated
maturity and also will provide that certain Change of Control events would
constitute a default thereunder. In addition, any future credit or other
borrowing agreements may contain similar restrictions. Finally, the Company's
ability to pay cash to the holders of Notes upon a repurchase may be limited
by the Company's then existing financial resources. See "Description of
Certain Other Indebtedness--New Revolving Credit Facility" and "Description of
Notes--Repurchase at the Option of Holders--Change of Control."
If a Change of Control were to occur, it is unlikely that the Company would
be able to both repay all of its obligations under the New Revolving Credit
Facility and repay other Indebtedness that would become payable upon the
occurrence of such Change of Control, unless it could obtain alternate
financing. There can be no assurance that the Company would be able to obtain
any such financing on commercially reasonable terms or at all, and
consequently no assurance can be given that the Company would be able to
purchase any of the Notes tendered pursuant to a Change of Control Offer.
FRAUDULENT CONVEYANCE; POSSIBLE INVALIDITY OF SUBSIDIARY GUARANTEES
Under applicable provisions of the United States Bankruptcy Code or
comparable provisions of state fraudulent transfer or conveyance laws, if the
Company, at the time it issues the Notes, or any one of the Guarantors, at the
time it issues its Subsidiary Guarantee, (a) incurs such Indebtedness with the
intent to hinder, delay or defraud creditors, or (b)(i) receives less than
reasonably equivalent value or fair consideration for incurring such
Indebtedness and (ii)(A) is insolvent at the time of the incurrence, (B) is
rendered insolvent by reason of such incurrence (after the application of the
proceeds of the Offering), (C) is engaged or is about to engage in a business
or transaction for which the assets that will remain with the Company or such
Guarantor constitute unreasonably small capital to carry on its business, or
(D) intends to incur, or believes that it will incur, debts beyond its ability
to pay such debts as they mature, then, in each such case, a court of
competent jurisdiction could avoid, in whole or in part, the Notes or such
Subsidiary Guarantee. The measure of insolvency for purposes of the foregoing
will vary depending upon the law applied in such case. Generally, however, the
Company or any Guarantor would be considered insolvent if the sum of its
debts, including contingent liabilities, was greater than all of its assets at
fair valuation or if the present fair saleable value of its assets was less
than the amount that would be required to pay the probable liability on its
existing debts, including contingent liabilities, as they become absolute and
matured.
To the extent any Subsidiary Guarantee were to be avoided as a fraudulent
conveyance or held unenforceable for any other reason, holders of the Notes
would cease to have any claim in respect of such Guarantor and would be
creditors solely of the Company and any Guarantor whose Subsidiary Guarantee
was not avoided or held unenforceable. In such event, the claims of the
holders of the Notes against the issuer of an invalid Subsidiary Guarantee
would be subject to the prior payment of all other liabilities of such
Guarantor. There can be no assurance that, after providing for all prior
claims, there would be sufficient assets to satisfy the claims of the holders
of the Notes relating to any avoided Subsidiary Guarantee.
Based upon financial and other information currently available to it, the
Company believes that, for purposes of the United States Bankruptcy Code and
state fraudulent transfer or conveyance laws, (a) the Notes and the Subsidiary
Guarantees are being issued without the intent to hinder, delay or defraud
creditors and for proper purposes and in good faith, (b) the Company and the
Guarantors have received reasonably equivalent value or fair consideration for
incurring such Indebtedness and (c) the Company and the Guarantors, after the
issuance of the Notes and the Subsidiary Guarantees and the application of the
net proceeds of the Notes, will be solvent, will have sufficient capital for
carrying on their respective businesses and will be able to pay their
respective
17
<PAGE>
debts as they mature. There can be no assurance, however, that a court passing
on such questions would agree with the Company's view. See "--Substantial
Leverage; Ability to Service Outstanding Indebtedness," "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
"Description of Notes" and "Description of Certain Other Indebtedness--New
Revolving Credit Facility."
LACK OF PUBLIC MARKET
The New Notes are being offered to the Holders of the Old Notes. The Old
Notes constitute a new class of securities with no established trading market.
The Old Notes are eligible for trading in the PORTAL market. To the extent
that Old Notes are tendered and accepted in the Exchange Offer, the trading
market for the remaining untendered Old Notes could be adversely affected.
There is no existing trading market for the New Notes, and there can be no
assurance regarding the future development of a market for the New Notes, or
the ability of Holders of the New Notes to sell their New Notes or the price
at which such Holders may be able to sell their New Notes. If such a market
were to develop, the New Notes could trade at prices that may be higher or
lower than their principal amount or purchase price, depending on many
factors, including prevailing interest rates, the Company's operating results
and the market for similar securities. Each Initial Purchaser has advised the
Company that it currently intends to make a market in the New Notes. The
Initial Purchasers are not obligated to do so, however, and any market-making
with respect to the New Notes may be discontinued at any time without notice.
Therefore, there can be no assurance as to the liquidity of any trading market
for the New Notes or that an active public market for the New Notes will
develop. The Company does not intend to apply for listing or quotation of the
New Notes on any securities exchange or stock market.
Historically, the market for noninvestment grade debt has been subject to
disruptions that have caused substantial volatility in the prices of such
securities. There can be no assurance that the market for the New Notes will
not be subject to similar disruptions. Any such disruptions may have an
adverse effect on Holders of the New Notes.
CONSEQUENCES OF FAILURE TO EXCHANGE OLD NOTES
Holders of Old Notes who do not exchange their Old Notes for New Notes
pursuant to the Exchange Offer will continue to be subject to the provisions
in the Indenture regarding transfer and exchange of the Old Notes and the
restrictions on transfer of such Old Notes as set forth in the legend thereon
as a consequence of the issuance of the Old Notes pursuant to exemptions from,
or in transactions not subject to, the registration requirements of the
Securities Act and applicable state securities laws. In general, the Old Notes
may not be offered or sold, unless registered under the Securities Act and
applicable state securities laws. The Company does not currently anticipate
that it will register Old Notes under the Securities Act. See "Description of
the Notes--Exchange Offer; Registration Rights." Based on interpretations by
the staff of the SEC, as set forth in no-action letters issued to third
parties, the Company believes that New Notes issued pursuant to the Exchange
Offer in exchange for Old Notes may be offered for resale, resold or otherwise
transferred by holders thereof (other than any such holder which is an
"affiliate" of the Company within the meaning of Rule 405 under the Securities
Act) without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that such New Notes are acquired in
the ordinary course or such holders' business and such holders, other than
broker-dealers, have no arrangement or understanding with any person to
participate in the distribution of such New Notes. However, the SEC has not
considered the Exchange Offer in the context of a no-action letter and there
can be no assurance that the staff of the SEC would make a similar
determination with respect to the Exchange Offer as in such other
circumstances. Each Holder, other than a broker-dealer, must acknowledge that
it is not engaged in, and does not intend to engage in, a distribution of such
New Notes and has no arrangement or understanding to participate in a
distribution of New Notes. If any Holder is an affiliate of the Company or is
engaged in or intends to engage in or has any arrangement or understanding
with respect to the distribution of the New Notes to be acquired pursuant to
the Exchange Offer, such Holder (i) may not rely on the applicable
interpretations of the staff of the SEC and (ii) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction. Each broker-dealer that receives New
Notes for its own account in exchange for Old Notes pursuant to the Exchange
Offer must acknowledge
18
<PAGE>
that such Old Notes were acquired by such broker-dealer as a result of market-
making activities or other trading activities and that it will deliver a
prospectus in connection with any resale of such New Notes. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of New Notes received in exchange for Old Notes where such Old
Notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities. The Company has agreed that, for a
period of 180 days after the Expiration Date, it will make this Prospectus
available to any broker-dealer for use in connection with any such resale. See
"Plan of Distribution." In addition, to comply with the securities laws of
certain jurisdictions, if applicable, the New Notes may not be offered or sold
unless they have been registered or qualified for sale in such jurisdictions
or an exemption from registration or qualification is available and is
complied with. The Company has agreed, pursuant to the Registration Rights
Agreement, subject to certain limitations specified therein, to register or
qualify the New Notes for offer or sale under the securities laws of such
jurisdiction as any holder reasonably requests in writing. Unless a holder so
requests, the Company does not currently intend to register or qualify the
sale of the New Notes in any such jurisdictions. See "The Exchange Offer."
19
<PAGE>
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Company as of September 30, 1996 (i) on a historical basis and (ii) as
adjusted to give pro forma effect to the Offering and the application of the
net proceeds therefrom (including the Acquisitions). This table should be read
in conjunction with the consolidated financial statements of the Company and
the notes thereto included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
----------------------
PRO FORMA
HISTORICAL AS ADJUSTED
---------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Total Indebtedness (including current portion):
Existing Credit Facility.......................... $ 71,355 $ --
New Revolving Credit Facility..................... -- -- (1)
10 7/8% Senior Notes due 2006 .................... -- 110,000
Other............................................. 3,068 3,068
-------- --------
Total Indebtedness.............................. 74,423 113,068
-------- --------
Shareholder's Equity................................ 37,411 36,369(2)
-------- --------
Total Capitalization............................ $111,834 $149,437
======== ========
</TABLE>
- --------
(1) Simultaneously with the consummation of the Offering, the Company entered
into a New Revolving Credit Facility that provides for maximum borrowings
of $25.0 million. No borrowings are reflected as outstanding as of
September 30, 1996 on a pro forma as adjusted basis since proceeds from
the Offering are assumed to be sufficient to repay all of the Company's
existing Indebtedness and to finance the Acquisitions.
(2) Pro forma as adjusted shareholder's equity reflects an extraordinary net
loss of approximately $2.0 million resulting from the write-off of
deferred financing costs. The net loss is calculated as of September 30,
1996 without regard to amortization after September 30, 1996. Also
reflected in shareholder's equity is a capital contribution from Holdings
following the issuance of Holdings Common Stock to the sellers of Money
Mart totaling $500,000 and Cash-N-Dash totaling $500,000.
20
<PAGE>
SELECTED HISTORICAL FINANCIAL DATA
The selected consolidated historical financial information below should be
read in conjunction with the consolidated financial statements and notes
thereto and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" included elsewhere in this Prospectus. The balance
sheet and statement of operations data of the Company as of and for the years
ended December 31, 1991, 1992, 1993 and as of and for the six months ended
June 30, 1994 (the "Predecessor") and as of and for the years ended June 30,
1995 and 1996 (the "Successor") have been derived from historical consolidated
financial statements of the Company audited by Ernst & Young LLP, independent
auditors. The selected consolidated operating data and other data presented
below for the six months ended June 30, 1993 and for the three month periods
ended September 30, 1995 and 1996, and the consolidated balance sheet data
presented below as of September 30, 1996 have been derived from the unaudited
consolidated financial statements of the Company and its subsidiaries included
elsewhere herein. In the opinion of management, the unaudited consolidated
financial statements for the interim periods include all adjustments
(consisting of normal recurring accruals) necessary for a fair presentation of
the results for such periods. The results of operations for the three months
ended September 30, 1996 are not necessarily indicative of the results to be
expected for the full fiscal year.
<TABLE>
<CAPTION>
PREDECESSOR COMPANY(1)
--------------------------------------------------------------------
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
---------------------------------------- --------------------------
1991 1992(2) 1993 1993 1994
------------ ------------ ------------ ------------ ------------
(DOLLARS IN THOUSANDS, EXCEPT CHECK CASHING DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Revenues:
Revenues from check
cashing............... $ 5,855 $ 7,922 $ 8,538 $ 4,338 $ 4,496
Revenues from
government services... 10,857 13,662 16,689 8,265 8,537
Other revenues......... 2,407 3,821 3,507 1,770 1,643
------------ ------------ ------------ ------------ ------------
Total revenues.......... 19,119 25,405 28,734 14,373 14,676
Store and regional
expenses:
Salaries and benefits.. 6,150 7,811 8,354 4,242 4,266
Occupancy.............. 1,796 2,504 2,578 1,317 1,313
Depreciation........... 809 1,140 1,102 579 483
Other.................. 5,418 7,347 8,139 4,000 4,132
------------ ------------ ------------ ------------ ------------
Total store and regional
expenses............... 14,173 18,802 20,173 10,138 10,194
Corporate expenses...... 2,067 3,133 4,414 2,358 2,321
Loss (gain) on store
closings and sales..... 171 283 110 -- 36
Other depreciation and
amortization........... 1,763 2,231 1,183 752 319
Recapitalization costs.. 1,432 -- -- -- --
Interest expense........ 2,554 1,744 1,597 847 721
------------ ------------ ------------ ------------ ------------
Income (loss) before
taxes.................. (3,041) (788) 1,257 278 1,085
Income tax provision
(benefit).............. 33 172 205 78 174
------------ ------------ ------------ ------------ ------------
Net income (loss)....... $ (3,074) $ (960) $ 1,052 $ 200 $ 911
============ ============ ============ ============ ============
Ratio of earnings to
fixed charges(6)....... -- -- 1.6x 1.2x 2.0x
OPERATING AND OTHER
DATA:
Adjusted EBITDA(7)...... $ 2,256 $ 4,610 $ 5,249 $ 2,456 $ 2,644
Adjusted EBITDA
margin(7).............. 11.8% 18.1% 18.3% 17.1% 18.0%
Stores in operation at
end of period.......... 85 107 108 108 109
CHECK CASHING DATA:
Face amount of checks
cashed................. $231,173,000 $267,009,000 $307,523,000 $157,219,000 $160,681,000
Number of checks
cashed................. 933,610 1,202,454 1,307,768 648,549 662,855
Average face amount per
check cashed........... $ 247.61 $ 222.05 $ 235.15 $ 242.42 $ 242.41
Average fee per check... $ 6.27 $ 6.59 $ 6.53 $ 6.69 $ 6.78
Average fee as a % of
face amount............ 2.53% 2.97% 2.78% 2.76% 2.80%
BALANCE SHEET DATA (AT
END OF PERIOD):
Cash.................... $ 9,082 $ 10,380 $ 10,974 $ 8,916 $ 11,023
Total assets............ 31,523 29,379 29,681 28,013 28,607
Total indebtedness...... 17,073 16,969 16,639 16,634 15,832
Shareholder's equity.... 7,380 5,974 5,708 6,238 6,309
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
SUCCESSOR COMPANY(1)
------------------------------------------------------
THREE MONTHS
ENDED
YEAR ENDED JUNE 30, SEPTEMBER 30,
-------------------------- --------------------------
1995(3) 1996(4) 1995(4) 1996(5)
------------ ------------ ------------ ------------
(DOLLARS IN THOUSANDS, EXCEPT CHECK CASHING DATA)
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Revenues:
Revenues from check
cashing............... $ 13,747 $ 20,290 $ 4,297 $ 7,732
Revenues from
government services... 16,966 15,936 4,036 3,684
Other revenues......... 4,121 6,204 1,408 2,229
------------ ------------ ------------ ------------
Total revenues.......... 34,834 42,430 9,741 13,645
Store and regional
expenses:
Salaries and benefits.. 11,042 13,975 3,245 4,691
Occupancy.............. 3,122 4,031 953 1,395
Depreciation........... 894 893 246 243
Other.................. 9,577 11,709 2,772 3,648
------------ ------------ ------------ ------------
Total store and regional
expenses............... 24,635 30,608 7,216 9,977
Corporate expenses...... 4,414 5,360 1,309 1,371
Loss (gain) on store
closings and sales..... 93 4,501 21 (18)
Other depreciation and
amortization........... 1,630 1,858 422 659
Recapitalization costs.. -- -- -- --
Interest expense........ 2,480 3,385 759 1,358
------------ ------------ ------------ ------------
Income (loss) before
taxes.................. 1,582 (3,282) 14 298
Income tax provision
(benefit).............. 1,022 (1,214) 71 246
------------ ------------ ------------ ------------
Net income (loss)....... $ 560 $ (2,068) $ (57) $ 52
============ ============ ============ ============
Ratio of earnings to
fixed charges(6)....... 1.5x -- 1.0x 1.2x
OPERATING AND OTHER
DATA:
Adjusted EBITDA(7)...... $ 6,679 $ 7,355 $ 1,462 $ 2,540
Adjusted EBITDA
margin(7).............. 19.2% 17.3% 15.0% 18.6%
Stores in operation at
end of period.......... 150 154 166 228
CHECK CASHING DATA:
Face amount of checks
cashed................. $510,771,000 $728,123,000 $166,984,000 $313,385,000
Number of checks
cashed................. 2,132,006 3,051,037 686,000 1,090,000
Average face amount per
check cashed........... $ 239.57 $ 238.65 $ 243.42 $ 287.51
Average fee per check... $ 6.45 $ 6.65 $ 6.26 $ 7.10
Average fee as a % of
face amount............ 2.69% 2.79% 2.57% 2.47%
BALANCE SHEET DATA (AT
END OF PERIOD):
Cash.................... $ 19,778 $ 22,545 $ 25,614 $ 41,784
Total assets............ 60,687 67,444 72,945 127,390
Total indebtedness...... 35,496 42,530 45,490 74,423
Shareholder's equity.... 15,775 13,707 15,718 37,411
</TABLE>
22
<PAGE>
- --------
(1) On June 30, 1994, MMHT, a Delaware corporation, was formed principally by
two private equity funds sponsored by WPG, through the issuance of 15,000
shares of common stock at $1,010.67 per share. Total consideration was
$15.2 million. Pursuant to an Agreement and Plan of Merger dated as of
June 30, 1994 among MMHT, Bear Stearns Acquisition XII, Inc. (the
predecessor majority shareholder of Holdings) and Holdings, Holdings and
MMHT consummated a merger whereby MMHT acquired all of the outstanding
common stock and warrants of Holdings for $10.5 million. MMHT was merged
with and into Holdings and the separate corporate existence of MMHT ceased
and Holdings was the surviving corporation in the merger. The acquisition
of Holdings on June 30, 1994 was accounted for under the purchase method
of accounting and, accordingly, the acquisition cost was allocated to the
fair value of net assets acquired. The cost of acquiring Holdings has, in
turn, been allocated to the Company and used to establish a new accounting
basis in the Company's financial statements. Approximately $20.9 million,
the acquisition cost in excess of the fair market value of the net assets
acquired, was recorded as goodwill. References to the Successor refer to
the Company for the periods subsequent to the acquisition on June 30, 1994
and references to the Predecessor refer to the Company for the periods
prior to the acquisition on June 30, 1994. Prior to the acquisition, the
Company maintained a December 31 fiscal year. Effective with the
acquisition, the Company changed its fiscal year to June 30.
(2) In February 1992, the Company acquired certain assets of Almost-A-Banc,
Inc. for $1.8 million. The acquisition was accounted for under the
purchase method of accounting and, accordingly, the operating results of
Almost-A-Banc, Inc. are included from the date of acquisition.
(3) On September 29, 1994, the Company purchased substantially all of the
assets of the check cashing operations of a company operating under the
name "Check Mart, Inc." with 24 locations in Washington, Utah, California,
and New Mexico. Total consideration for the purchase was $7.8 million,
which was funded by borrowings under the Existing Credit Facility and a
$720,000 subordinated note payable. Results of operations and cash flows
for the period from September 30, 1994 to June 30, 1995 and for the year
ended June 30, 1996 are included in the Company's consolidated financial
statements. Approximately $6.7 million, the acquisition cost in excess of
the fair market value of the net assets acquired, was recorded as
goodwill.
(4) On September 18, 1995, the Company purchased all of the outstanding stock
or certain assets of several entities which operate 19 check cashing
stores in California, Arizona, Ohio and Wisconsin and operate under the
name "Chex$Cashed." Total consideration for the purchase was $7.4 million,
which was funded through borrowings under the Existing Credit Facility.
Approximately $6.7 million, the excess of the purchase price over the fair
market value of identifiable net assets, was recorded as goodwill.
(5) On August 8, 1996, the Company purchased all of the outstanding common
stock of AnyKind Check Cashing Centers, Inc. which operates 63 check
cashing stores in seven states and the District of Columbia. Total
consideration for the purchase was $31.0 million plus initial working
capital of approximately $6.0 million. On August 28, 1996, the Company
acquired the assets associated with the operations of "ABC Check Cashing"
for $6.0 million in cash. ABC operates approximately 15 check cashing
centers within the Cleveland, Ohio area. The acquisitions were accounted
for under the purchase method of accounting. Approximately $36.5 million,
the acquisition cost in excess of the fair market value of the net assets
acquired, was recorded as goodwill. The acquisitions were funded through
borrowings under the Existing Credit Facility and issuance of Holdings
Common Stock.
(6) For purposes of the ratio of earnings to fixed charges, (i) earnings
include earnings before income taxes and fixed charges and (ii) fixed
charges consist of interest on all indebtedness, amortization of deferred
financing costs and that portion of rental expense (one-third) that the
Company believes to be representative of interest. The Company's earnings
were insufficient to cover fixed charges by $3.0 million and $788,000 for
the years ended December 31, 1991 and 1992, respectively, and by $3.3
million for the year ended June 30, 1996.
(7) Adjusted EBITDA is earnings before interest, taxes, depreciation,
amortization, and loss on store closings and sales. Adjusted EBITDA does
not represent cash flows as defined by generally accepted accounting
principles and does not necessarily indicate that cash flows are
sufficient to fund all of the Company's cash needs. Adjusted EBITDA should
not be considered in isolation or as a substitute for net income (loss),
cash flows from operating activities or other measures of liquidity
determined in accordance with generally accepted accounting principles.
The Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of
revenues.
23
<PAGE>
UNAUDITED CONDENSED COMBINED PRO FORMA FINANCIAL STATEMENTS
The unaudited condensed combined pro forma statements of income for the
fiscal year ended June 30, 1996 and for the three months ended September 30,
1996 set forth herein give effect to the Acquisitions as if the Acquisitions
and the acquisition of Chex$Cashed (acquired in September 1995) had occurred
as of July 1, 1995 and July 1, 1996, respectively. The unaudited condensed
combined pro forma statements of income also give effect to the use of the net
proceeds of $105.7 million from the Offering and the net proceeds of $21.7
million from the Equity Transaction as if such transactions had occurred on
July 1, 1995 and July 1, 1996, respectively. See notes to the unaudited
condensed combined pro forma financial statements for further explanation of
these transactions.
The unaudited condensed combined pro forma balance sheet as of September 30,
1996 set forth herein gives effect to the Acquisitions and the Offering as if
such transactions had occurred on September 30, 1996.
The unaudited condensed combined pro forma financial statements are not
necessarily indicative of what the Company's results of operations and balance
sheet would have been had the Acquisitions, the Equity Transaction and the
Offering been consummated at the indicated dates, nor are they necessarily
indicative of the Company's results of operations and balance sheet for any
future period. The unaudited condensed combined pro forma financial statements
should be read in conjunction with the consolidated financial statements and
related notes thereto included elsewhere in this Prospectus.
24
<PAGE>
UNAUDITED CONDENSED COMBINED PRO FORMA INCOME
STATEMENT AND OTHER OPERATING DATA FOR THE
FISCAL YEAR ENDED JUNE 30, 1996
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ADJUSTMENTS
FOR
HISTORICAL(A) ACQUISITIONS,
----------------------------------------------------------------- EQUITY PRO
TRANSACTION FORMA
MONEY AND THE AS
DFG CHEX$CASHED ANYKIND ABC MART(C) CASH-N-DASH C&C OFFERING ADJUSTED
------- ----------- ------- ------ ------- ----------- ------ ------------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF
OPERATIONS DATA:
Revenues......... $42,430 $1,269 $22,748 $4,807 $9,413 $6,232 $4,831 $ -- $91,730
Store and
regional
expenses:
Salaries and
benefits....... 13,975 441 6,757 1,564 2,233 1,837 1,882 -- 28,689
Occupancy....... 4,031 160 2,602 620 737 811 699 -- 9,660
Depreciation.... 893 12 201 156 295 129 196 -- 1,882
Other........... 11,709 229 5,624 1,072 2,243 1,119 1,219 -- 23,215
------- ------ ------- ------ ------ ------ ------ ------- -------
Total store and
regional
expenses........ 30,608 842 15,184 3,412 5,508 3,896 3,996 -- 63,446
Corporate
expenses........ 5,360 544 4,827 1,141 3,573 839 910 (8,429)(d) 8,765
Loss on store
closings and
sales........... 4,501 -- -- 3 -- -- -- -- 4,504
Other
depreciation and
amortization.... 1,858 1 7 34 68 57 21 2,675 (e) 4,721
Interest ex-
pense........... 3,385 27 509 129 174 83 53 8,430 (f) 12,790
------- ------ ------- ------ ------ ------ ------ ------- -------
Income (loss)
before income
taxes........... (3,282) (145) 2,221 88 90 1,357 (149) (2,676) (2,496)
Income tax
(benefit)
provision ...... (1,214)(g) (40) 639 2 18 26 (6) 349 (h) (226)
------- ------ ------- ------ ------ ------ ------ ------- -------
Net income
(loss).......... $(2,068) $ (105) $ 1,582 $ 86 $ 72 $1,331 $ (143) $(3,025) $(2,270)
======= ====== ======= ====== ====== ====== ====== ======= =======
Pro forma ratio
of earnings to
fixed
charges(i)...... --
Pro forma
Adjusted
EBITDA.......... $21,401
Pro forma ratio
of Adjusted
EBITDA to cash
interest
expense......... 1.73x
</TABLE>
25
<PAGE>
UNAUDITED CONDENSED COMBINED PRO FORMA INCOME
STATEMENT AND OTHER OPERATING DATA FOR THE
THREE MONTHS ENDED SEPTEMBER 30, 1996
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
HISTORICAL(B) ADJUSTMENTS
------------------------------------------------------ FOR
ACQUISITIONS, PRO
MONEY AND THE FORMA AS
DFG ANYKIND ABC MART(C) CASH-N-DASH C&C OFFERING ADJUSTED
------- -------- ---- ------- ----------- ------ ------------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF
OPERATIONS DATA:
Revenues................ $13,645 $ 2,571 $727 $2,588 $1,386 $1,247 $ -- $22,164
Store and regional
expenses: --
Salaries and benefits.. 4,691 518 (1) 237 581 421 498 -- 6,946
Occupancy.............. 1,395 291 99 209 207 182 -- 2,383
Depreciation........... 243 36 25 70 32 35 -- 441
Other.................. 3,648 722 190 409 202 264 -- 5,435
------- -------- ---- ------ ------ ------ ------ -------
Total store and regional
expenses............... 9,977 1,567 551 1,269 862 979 -- 15,205
Corporate expenses...... 1,371 2,032 182 1,240 165 177 (2,753)(d) 2,414
Gain on store closings
and sales.............. (18) -- -- -- -- -- -- (18)
Other depreciation and
amortization........... 659 1 4 20 -- 6 494 (e) 1,184
Interest expense........ 1,358 8 5 37 19 11 1,760 (f) 3,198
------- -------- ---- ------ ------ ------ ------ -------
Income (loss) before
income taxes........... 298 (1,037) (15) 22 340 74 499 (f) 181
Income tax provision.... 246 6 -- -- 5 -- 35 (h) 292
------- -------- ---- ------ ------ ------ ------ -------
Net income (loss)....... $ 52 $ (1,043) $(15) $ 22 $ 335 $ 74 $ 464 $ (111)
======= ======== ==== ====== ====== ====== ====== =======
Pro forma ratio of earn-
ings to fixed charges.. 1.1x
Pro forma Adjusted
EBITDA................. $ 4,986
Pro forma ratio of
Adjusted EBITDA to cash
interest
expense................ 1.61x
</TABLE>
26
<PAGE>
UNAUDITED CONDENSED COMBINED PRO FORMA BALANCE SHEET
AS OF SEPTEMBER 30, 1996
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
AS ADJUSTED
ADJUSTMENTS FOR THE
DFG FOR THE OFFERING AND THE
HISTORICAL OFFERING(J) ACQUISITIONS(K)
---------- ----------- ----------------
<S> <C> <C> <C>
ASSETS:
Cash and cash equivalents............. $ 41,784 $ 34,320 $ 48,727
Accounts receivable................... 5,098 -- 5,098
Properties and equipment, net......... 4,710 -- 7,012
Intangible assets..................... 68,333 -- 94,468
Prepaid expenses and other assets..... $ 7,465 2,283 9,748
-------- -------- --------
Total assets........................ $127,390 $ 36,603 $165,053
======== ======== ========
LIABILITIES AND SHAREHOLDER'S EQUITY:
Accounts payable and accrued ex-
penses............................... $ 15,556 $ -- $ 15,556
Revolving credit facility............. 6,077 (6,077) --
Long-term debt and subordinated notes
payable.............................. 68,346 (65,278) 3,068
10 7/8% Senior Notes due 2006......... -- 110,000 110,000
Shareholder's equity.................. 37,411 (2,042) 36,369
-------- -------- --------
Total liabilities and shareholder's
equity............................. $127,390 $ 36,603 $165,053
======== ======== ========
</TABLE>
27
<PAGE>
NOTES TO UNAUDITED CONDENSED COMBINED
PRO FORMA FINANCIAL DATA
ACQUISITIONS
As indicated below, the Company has made the following acquisitions since
July 1995:
<TABLE>
<CAPTION>
DATE OF PURCHASE
BUSINESS PURCHASE PRICE
-------- -------- -------------
<S> <C> <C>
Chex$Cashed........................................... 9/95 $ 7.4 million
AnyKind .............................................. 8/96 31.0 million
ABC .................................................. 8/96 6.0 million
Money Mart ........................................... 11/96 17.7 million
Cash-N-Dash .......................................... 11/96 7.3 million
C&C................................................... 11/96 3.8 million
</TABLE>
The acquisitions of AnyKind and ABC were funded in part through the Equity
Transaction, the issuance of $2.0 million of Holdings Common Stock to the
selling shareholders of AnyKind and additional borrowings of $35.0 million
under the Existing Credit Facility.
The aforementioned purchase prices for Cash-N-Dash and C&C include
contingent payments to the sellers of up to $750,000 payable over four years
for Cash-N-Dash and up to $300,000 payable over three years for C&C based on
future revenues of the Company.
The acquisition of ABC was made through the acquisition of assets and the
assumption of certain liabilities, while the acquisitions of Chex$Cashed and
AnyKind were made through the purchase of substantially all of the outstanding
common stock of each company. Each acquisition was accounted for under the
purchase method of accounting and all of the pending acquisitions will be
accounted for under the purchase method of accounting.
The pro forma results of operations adjustments for the year ended June 30,
1996 are those necessary to reflect the Company's net income as if the
Acquisitions, the Equity Transaction and the Offering had taken place as of
July 1, 1995. The pro forma results of operations for the three months ended
September 30, 1996 are those necessary to reflect the Company's net income as
if the Acquisitions, the Equity Transaction and the Offering had taken place
as of July 1, 1996. The pro forma balance sheet includes adjustments to
reflect the Acquisitions, the Equity Transaction and the Offering as if they
had occurred on September 30, 1996.
The pro forma adjustments are based upon available information and upon
certain assumptions that the Company believes are reasonable. The unaudited
pro forma financial statement data are provided for informational purposes
only and do not purport to be indicative of the Company's results of
operations that would actually have been obtained had such acquisitions been
completed as of July 1, 1995 or July 1, 1996, or that may be obtained in the
future. They should be read in conjunction with the audited historical
consolidated financial statements and related notes thereto of the Company,
AnyKind, Money Mart and Cash-N-Dash and "Management's Discussion and Analysis
of Financial Condition and Results of Operations" included elsewhere in this
Prospectus.
OFFERING
The Company has implemented a financing plan which includes the Offering
with gross proceeds of $110.0 million and the establishment of the New
Revolving Credit Facility, which provides the Company with up to $25.0 million
of availability. The proceeds of the Offering, together with borrowings under
the New Revolving Credit Facility, were used to repay all outstanding
Indebtedness of $65.3 million under the Existing Credit Facility, to fund the
cash purchase price, including initial working capital and fees and expenses,
of the Money Mart, Cash-N-Dash and C&C acquisitions of $28.8 million, and to
pay related fees and expenses of the Offering of $4.3 million. The repayment
of all of the Company's existing Indebtedness under the Existing Credit
Facility
28
<PAGE>
resulted in an extraordinary loss, net of taxes, in the three months ended
December 31, 1996 of approximately $2.0 million. This loss is reflected as an
adjustment to retained earnings in the condensed combined pro forma balance
sheet as of September 30, 1996, but is not reflected in the condensed combined
pro forma statement of income.
NOTES
(a) Represents (i) the historical consolidated statement of income of the
Company, (ii) the historical results of operations of Chex$Cashed for the
period from July 1, 1995 to September 18, 1995 (date of acquisition) and
(iii) the historical consolidated statements of income of AnyKind, ABC,
Money Mart, Cash-N-Dash and C&C, respectively, for the twelve months ended
June 30, 1996.
(b) Represents (i) the historical consolidated statement of income of the
Company for the three months ended September 30, 1996, (ii) the historical
results of operations of AnyKind for the period from July 1, 1996 to
August 8, 1996 (date of acquisition), (iii) the historical results of
operations of ABC for the period from July 1, 1996 to August 28, 1996
(date of acquisition) and (iv) the historical consolidated statements of
income of Money Mart, Cash-N-Dash and C&C, respectively, for the three
months ended September 30, 1996.
(c) Pro forma financial information of non-guarantor subsidiary;
As discussed in this Prospectus, the Company's payment obligations under
the Notes and the New Revolving Credit Facility are jointly and severally
guaranteed by each of the Company's current and future domestic
subsidiaries. The accompanying unaudited condensed combined pro forma
financial statements include the pro forma statements of income and balance
sheet for Money Mart, a non-guarantor Canadian subsidiary.
The following represents condensed pro forma results of operations for
Money Mart, a non-guarantor subsidiary (dollars in thousands):
<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS ENDED
JUNE 30, 1996 SEPTEMBER 30, 1996
------------- ------------------
<S> <C> <C>
Revenues............. $9,400 $2,600
Store and regional
expenses............ 5,500 1,300
Corporate and other
expenses............ 2,300 600
------ ------
Pre-tax income....... $1,600 $ 700
====== ======
</TABLE>
As of September 30, 1996, total assets for Money Mart on a pro forma basis
were $18.5 million, which include $16.9 million of intangible assets
(goodwill).
(d) Corporate expenses were reduced by (dollars in thousands):
<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS ENDED
JUNE 30, 1996 SEPTEMBER 30, 1996
------------- ------------------
<S> <C> <C>
Consulting and
management fees paid
to former
shareholders of
AnyKind............ $4,154 $1,301
Money Mart......... 1,946 762
ABC................ 422 53
Chex$Cashed........ 171 --
Compensation and
benefits paid to
certain former
executives of
AnyKind............ $ 646 $ 419
ABC................ 281 58
C&C................ 682 138
Cash-N-Dash........ 127 22
------ ------
$8,429 $2,753
====== ======
</TABLE>
These historical corporate expenses are not expected to be incurred by the
Company in the future.
29
<PAGE>
(e) Reflects increase in amortization expense as a result of the Acquisitions.
The purchase accounting includes an allocation to intangible assets,
including goodwill and costs of contracts acquired.
(f) Reflects an adjustment for interest expense to give effect to the Offering
plus amortization of related deferred financing fees less elimination of
interest expense as a result of the repayment of all outstanding
indebtedness under the Existing Credit Facility. In addition, this
adjustment includes a reduction in principal of revolving Indebtedness
under the Existing Credit Facility through the use of the proceeds from
the Equity Transaction, as if such transaction had occurred at July 1,
1995 (with respect to the fiscal year ended June 30, 1996) and July 1,
1996 (with respect to the three months ended September 30, 1996). This
adjustment includes non-cash amortization of deferred financing fees
associated with the Offering, of $430,000 and $107,500 for the year ended
June 30, 1996 and for the three months ended September 30, 1996,
respectively.
(g) The 1996 income tax expense includes a benefit of $456,000 due to the
change in the Company's valuation allowance. Although realization is not
assured, management has determined, based on the Company's history of
earnings and its expectation for the future, that taxable income of the
Company will more likely than not be sufficient to fully utilize its
deferred income tax assets.
(h) Represents the income tax impact of the Acquisitions as if the acquired
companies were wholly owned by the Company for the year ended June 30,
1996 and for the three months ended September 30, 1996, after giving
effect to the pro forma adjustments including the non-deductible
amortization of intangible assets (goodwill).
(i) For purposes of the pro forma ratio of earnings to fixed charges, (i)
earnings include earnings before income taxes and fixed charges and (ii)
fixed charges consist of interest on all Indebtedness, amortization of
deferred financing costs and that portion of rental expense (one-third)
that the Company believes to be representative of interest. On a pro forma
basis, the Company's earnings were insufficient to cover fixed charges by
$2.5 million for the year ended June 30, 1996.
(j) Represents the following adjustments as if they had occurred on September
30, 1996: (i) receipt of the gross proceeds and fees and expenses related
to the proceeds from the Offering, (ii) application of the proceeds to
repay all Indebtedness under the Existing Credit Facility and (iii) the
write-off of $3.1 million (approximately $2.0 million net of taxes) of
deferred financing costs related to the Existing Credit Facility.
(k) Adjusted to reflect the balance sheet as though the Money Mart, Cash-N-
Dash and C&C acquisitions and the Offering had occurred on September 30,
1996. These amounts include recording the excess of cost over the fair
value of net assets acquired (goodwill) and costs of contracts acquired.
The balance sheet also reflects a $1.0 million capital contribution from
Holdings related to the issuance of an aggregate of $1.0 million of
Holdings Common Stock to the sellers of Money Mart and Cash-N-Dash.
(l) The unaudited results of AnyKind for the period July 1, 1996 through
August 8, 1996 (the date of the acquisition by the Company) are presented
herein. The Company has determined that the salaries and benefits
component of AnyKind's store expenses (approximately 20.1% of revenues)
for this period immediately preceding the acquisition are abnormally low
as compared to AnyKind's historical expense levels (29.7% of revenues for
the twelve months ended June 30, 1996.) For the period August 8, 1996
through September 30, 1996, the salaries and benefits expenses of the
acquired stores as a percentage of revenues was approximately 35.4%.
Furthermore, the Company's consolidated store salaries and benefits
expenses for the three months ended September 30, 1996 as a percentage of
revenues were 34.4%.
30
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion is based upon and should be read in conjunction
with "Selected Historical Financial Data" and the consolidated financial
statements of the Company, including the notes thereto, included elsewhere in
this Prospectus.
GENERAL
The Company has historically derived its revenues primarily from providing
check cashing services and distributing public assistance benefits and food
coupons. In addition, the Company provides other consumer financial products
and services including money orders, money transfers, loans, insurance and
bill payment. For the year ended June 30, 1996 and for the three months ended
September 30, 1996, on a historical basis, check cashing revenues as a
percentage of total revenues approximated 48.0% and 56.7%, respectively. On a
pro forma basis for the year ended June 30, 1996 and for the three months
ended September 30, 1996, the Company's check cashing revenues would have
accounted for 60.0% and 59.6% of the Company's total pro forma revenues,
respectively. The Company expects that revenues from government services will
continue to decrease as a percentage of total revenues in the future.
The check cashing industry in the United States is highly fragmented, and
has experienced considerable growth as store locations have increased from
approximately 1,350 in 1986 to approximately 5,400 as of July 1996. The
Company believes it is one of only four domestic check cashing store networks
with more than 100 locations. The industry is comprised of mostly local chains
and single-unit operators. The Company believes that industry growth has been
fueled by several demographic and socioeconomic trends, including a decline in
the number of households with bank deposit accounts, an increase in low-paying
service sector jobs and an overall increase in the lower-income population.
On June 30, 1994, the Company changed its fiscal year end from December 31
to June 30. Accordingly, the following discussion of results of operations
compares the three months ended September 30, 1996 with the three months ended
September 30, 1995, the full fiscal year ended June 30, 1996 with the fiscal
year ended June 30, 1995, and the six-month transition period ended June 30,
1994 with the six months ended June 30, 1993.
All of the Company's acquisitions have been accounted for under the purchase
method of accounting. Therefore, the historical consolidated results of
operations include the revenues and expenses of all of the acquired companies
since their respective dates of acquisition. The comparability of the
historical financial data is significantly impacted by the timing of the
Company's acquisitions. The following table sets forth information with
respect to recent acquisitions completed by the Company during the periods
discussed below:
<TABLE>
<CAPTION>
NUMBER
COMPANY OF STORES MONTH ACQUIRED PURCHASE PRICE
------- --------- -------------- --------------
<S> <C> <C> <C>
Check Mart, Inc...................... 24 September 1994 $ 7.8 million
ARI, Inc............................. 19 February 1995 4.3 million
Pacific Check Exchange, Inc.......... 2 June 1995 0.4 million
Chex$Cashed.......................... 19 September 1995 7.4 million
Southland kiosks--Texas.............. 11 May 1996 0.5 million
AnyKind.............................. 63 August 1996 $31.0 million
ABC.................................. 15 August 1996 6.0 million
</TABLE>
The aforementioned purchase price amounts do not reflect borrowings to
provide for the working capital needs of the acquired entities. The purchase
prices including working capital were as follows: $9.7 million for Check Mart,
Inc., $5.1 million for ARI, Inc., $448,000 for Pacific Check Exchange, Inc.,
$9.1 million for Chex$Cashed; $37.0 million for AnyKind and $7.5 million for
ABC.
31
<PAGE>
Recent Events
Since September 30, 1996, the Company has completed three significant
acquisitions. The following table sets forth information with regard to the
Acquisitions:
<TABLE>
<CAPTION>
NUMBER
COMPANY OF STORES MONTH ACQUIRED PURCHASE PRICE
------- --------- -------------- --------------
<S> <C> <C> <C>
Money Mart........................... 143(1) November 1996 17.7 million
Cash-N-Dash.......................... 32 November 1996 7.3 million
C&C.................................. 22 November 1996 3.8 million
</TABLE>
- --------
(1)Includes 107 franchised stores.
The aforementioned purchase price amounts do not reflect borrowings to
provide for the working capital needs of the acquired entities. The purchase
prices including working capital were as follows: The purchase prices for
Cash-N-Dash and C&C include estimated contingent payments to the sellers of
$750,000 for Cash-N-Dash (payable over four years) and $300,000 for C&C
(payable over three years) based on future revenues.
The Management's Discussion and Analysis of Financial Condition and Results
of Operations solely reflects the historical results of the Company and does
not give effect to the Money Mart, Cash-N-Dash or C&C acquisitions. The
repayment of substantially all of the Company's existing Indebtedness will
result in an extraordinary loss, net of taxes, in the second quarter of fiscal
year 1997 of approximately $2.0 million. This loss results from the write-off
of the deferred financing costs associated with the Existing Credit Facility.
Due to the rapid growth of the Company, period-to-period comparisons of
financial data are not necessarily indicative of the results for subsequent
periods and should not be relied upon as an indicator of the future
performance of the Company. See "Risk Factors--Seasonality."
Results of Operations
The following table sets forth the Company's results of operations as a
percentage of revenues for the indicated periods:
<TABLE>
<CAPTION>
THREE MONTHS
SIX MONTHS ENDED ENDED
JUNE 30, YEAR ENDED JUNE 30, SEPTEMBER 30,
----------------- ------------------- --------------
1993 1994 1995 1996 1995 1996
-------- -------- --------- --------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Revenues:
Revenues from check
cashing.............. 30.2% 30.6% 39.5% 47.8% 44.1% 56.7%
Revenues from
government services.. 57.5% 58.2% 48.7% 37.6% 41.4% 27.0%
Other revenues........ 12.3% 11.2% 11.8% 14.6% 14.5% 16.3%
-------- -------- --------- --------- ------ ------
Total revenues........ 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Store and regional
expenses:
Salaries and
benefits............. 29.5% 29.1% 31.7% 32.9% 33.3% 34.4%
Occupancy............. 9.2% 8.9% 9.0% 9.5% 9.8% 10.2%
Depreciation.......... 4.0% 3.3% 2.6% 2.1% 2.5% 1.8%
Other................. 27.8% 28.2% 27.5% 27.6% 28.5% 26.7%
-------- -------- --------- --------- ------ ------
Total store and regional
expenses............... 70.5% 69.5% 70.8% 72.1% 74.1% 73.1%
Corporate expenses...... 16.4% 15.8% 12.6% 12.6% 13.4% 10.0%
Loss (gain) on store
closings and sales..... 0.0% 0.2% 0.3% 10.6% 0.2% (0.1%)
Other depreciation and
amortization........... 5.2% 2.2% 4.7% 4.4% 4.3% 4.8%
Interest expense........ 5.9% 4.9% 7.1% 8.0% 7.8% 10.0%
-------- -------- --------- --------- ------ ------
Income (loss) before
taxes.................. 2.0% 7.4% 4.5% (7.7%) 0.2% 2.2%
Income tax provision
(benefit).............. 0.5% 1.2% 2.9% (2.9%) 0.7% 1.8%
-------- -------- --------- --------- ------ ------
Net income (loss)....... 1.5% 6.2% 1.6% (4.8%) (0.5%) 0.4%
======== ======== ========= ========= ====== ======
</TABLE>
32
<PAGE>
THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 1995
Total revenues were $13.6 million for the three months ended September 30,
1996 as compared to $9.7 million for the quarter ended September 30, 1995, an
increase of $3.9 million, or 40.2%. Of this increase, $1.2 million resulted
from the inclusion of the results of operations of the entities conducting
business as Chex$Cashed, which were acquired in September 1995, $3.0 million
resulted from the acquisition of AnyKind in August 1996 and $400,000 resulted
from the acquisition of ABC in August 1996. The increase was offset in part by
revenues related to the 19 stores acquired from ARI, Inc., which were closed
in December 1995 and which generated $500,000 in revenue for the three month
period ended September 30, 1995. See "--Year Ended June 30, 1996 Compared to
Year Ended June 30, 1995." For stores that were opened and owned by the
Company during the entire period from July 1, 1995 through September 30, 1996,
revenues increased by 0.6%. This increase resulted from an increase in other
revenues of 20.2%, offset in part by a decrease in revenues from government
services of 5.0% and a decrease in revenues from check cashing of 1.1%. The
decrease in revenues from government services resulted from the reduction in
the number of individuals receiving benefits under government programs. The
Company receives revenue on its government contracts based primarily on the
number of transactions it executes. The Company expects that the number of
benefits recipients will continue to decrease, which would result in a
continuing decline in the Company's government services revenue.
Store expenses were $10.0 million for the three months ended September 30,
1996 as compared to $7.2 million for the three months ended September 30,
1995, an increase of $2.8 million, or 38.9%. The acquisitions of Chex$Cashed,
AnyKind and ABC resulted in an increase in store expenses of $3.3 million,
while the 19 stores closed in December 1995 resulted in a decrease in store
expenses of $800,000. Other acquisitions accounted for the remaining $300,000
increase. Store expenses as a percentage of revenues decreased from 74.1% in
the three months ended September 30, 1995 to 73.1% in the three months ended
September 30, 1996. This decrease was due to operating losses of the stores
acquired from ARI, Inc. in February 1995. During December 1995, the Company
decided to close or sell all of the stores acquired from ARI, Inc. and
recognized a pre-tax charge of approximately $4.4 million relating thereto.
Excluding the results of operations of the ARI, Inc. stores, store expenses as
a percentage of revenues were 69.5% and 73.1% for the three months ended
September 30, 1995 and 1996, respectively.
Salaries and benefits were $4.7 million for the three months ended September
30, 1996 as compared to $3.2 million for the three months ended September 30,
1995, an increase of $1.5 million, or 46.9%. The acquisitions of Chex$Cashed,
AnyKind and ABC accounted for an increase in salaries and benefits of $1.6
million while the 19 stores closed in December 1995 resulted in a decrease in
salaries and benefits of $300,000. The Company does not expect the recently
enacted increase in the minimum wage to have any significant impact on the
Company's future results of operations.
Occupancy expense was $1.4 million for the three months ended September 30,
1996 as compared to $1.0 million for the three months ended September 30,
1995, an increase of $400,000, or 40.0%. The acquisitions of Chex$Cashed,
AnyKind and ABC accounted for an increase of $500,000, while the 19 stores
closed in December 1995 resulted in a decrease of $100,000. Occupancy expense
as a percentage of revenues increased from 9.8% for the three months ended
September 30, 1995 to 10.2% for the three months ended September 30, 1996.
Depreciation expense remained relatively unchanged for the three months
ended September 30, 1996 as compared to the three months ended September 30,
1995. Any increases in depreciation expense resulting from the acquisitions of
Chex$Cashed, AnyKind and ABC were offset by decreases in depreciation
resulting from store equipment in the Company's existing store base becoming
fully depreciated.
Other store and regional expenses were $3.6 million for the three months
ended September 30, 1996 as compared to $2.8 million for the three months
ended September 30, 1995, an increase of $800,000, or 28.6%. The acquisitions
of Chex$Cashed, AnyKind and ABC accounted for an increase in other store and
regional expenses of $1.1 million, while the 19 stores closed in December 1995
resulted in a decrease in other store and
33
<PAGE>
regional expenses of $400,000. Other store and regional expenses consist of
bank charges, armored security costs, net returned checks, cash and food stamp
shortages, insurance and other costs incurred by the stores.
Corporate expenses were $1.4 million for the three months ended September
30, 1996 as compared to $1.3 million for the three months ended September 30,
1995, an increase of $100,000, or 7.7%. This increase resulted from the
additional corporate costs, primarily salaries and benefits, associated with
the acquisitions completed during fiscal 1995 and fiscal 1996. Corporate
expenses as a percentage of revenues decreased from 13.4% for the three months
ended September 30, 1995 to 10.0% for the three months ended September 30,
1996.
Other depreciation and amortization expenses were $700,000 for the three
months ended September 30, 1996 as compared to $400,000 for the three months
ended September 30, 1995, an increase of $300,000, or 75.0%. This increase
resulted primarily from the amortization expense associated with the goodwill
and other intangibles recognized as part of the acquisitions of Chex$Cashed,
AnyKind and ABC.
Interest expense was $1.4 million for the three months ended September 30,
1996 as compared to $800,000 for the three months ended September 30, 1995, an
increase of $600,000, or 75.0%. This increase was primarily attributable to
increased average outstanding indebtedness to finance the acquisitions of
Chex$Cashed, AnyKind and ABC.
YEAR ENDED JUNE 30, 1996 COMPARED TO THE YEAR ENDED JUNE 30, 1995
Total revenues were $42.4 million for the year ended June 30, 1996 as
compared to $34.8 million for the year ended June 30, 1995, an increase of
$7.6 million, or 21.8%. Of this increase, $4.6 million resulted from the
inclusion of the results of operations of the entities conducting business as
Chex$Cashed, which were acquired in September 1995, and $2.5 million from a
full year of operations of Check Mart, Inc., acquired in September 1994. The
remaining increase resulted from the other acquisitions completed during
fiscal 1995 and 1996. For stores that were opened and owned by the Company in
all twelve months of each fiscal year, revenues decreased by 0.9%. This
decrease resulted from a decrease in revenues from government services of
6.1%, offset by an increase in revenues from check cashing of 3.5%. The
decrease in revenues from government services resulted from the reduction in
the number of individuals receiving benefits under government programs during
fiscal year 1996.
Store expenses were $30.6 million for the year ended June 30, 1996 as
compared to $24.6 million for the year ended June 30, 1995, an increase of
$6.0 million, or 24.4%. Of this increase, $2.9 million was due to the
acquisition of Chex$Cashed and $1.6 million was due to the acquisition of
Check Mart, Inc. The remaining increase resulted from the other acquisitions
completed during fiscal 1995 and 1996. Store expenses as a percentage of
revenues increased from 70.8% in fiscal 1995 to 72.1% in fiscal 1996 due to
operating losses of stores acquired from ARI, Inc. in February 1995. During
fiscal year 1996, the Company decided to close or sell all of the stores
acquired from ARI, Inc. and recognized a pre-tax charge of approximately $4.4
million relating thereto. Excluding the results of operations of the ARI, Inc.
stores, store expenses as a percentage of revenues were 69.2% and 69.1% for
the years ending June 30, 1995 and 1996, respectively.
Salaries and benefits were $14.0 million for the year ended June 30, 1996 as
compared to $11.0 million for the year ended June 30, 1995, an increase of
$3.0 million, or 27.3%. Of this increase, $1.5 million resulted from the
acquisition of Chex$Cashed and $800,000 resulted from the acquisition of Check
Mart, Inc. The remaining increase resulted from other acquisitions completed
during fiscal 1995 and 1996.
Occupancy expense was $4.0 million for the year ended June 30, 1996 as
compared to $3.1 million for the year ended June 30, 1995, an increase of
$900,000, or 29.0%. Of this increase, $500,000 resulted from the acquisition
of Chex$Cashed and $200,000 resulted from the acquisition of Check Mart, Inc.
Occupancy expense as a percentage of revenues increased from 9.0% for the year
ended June 30, 1995 to 9.5% for the year ended June 30, 1996 due to the impact
of the performance of the ARI, Inc. stores acquired in February 1995, which
were subsequently sold or closed.
Depreciation expense remained relatively unchanged for the fiscal year ended
June 30, 1996 as compared to the year ended June 30, 1995. Any increases in
depreciation expense resulting from the Chex$Cashed and Check
34
<PAGE>
Mart acquisitions were offset by decreases from much of the store equipment in
the Company's existing store base becoming fully depreciated during fiscal
1995 and fiscal 1996.
Other store and regional expenses were $11.7 million for the year ended June
30, 1996 as compared to $9.6 million for the year ended June 30, 1995, an
increase of $2.1 million, or 21.9%. Of this increase, $900,000 resulted from
the acquisition of Chex$Cashed and $600,000 resulted from the acquisition of
Check Mart, Inc. The remaining increase resulted primarily from the other
acquisitions completed during fiscal 1995 and fiscal 1996.
Corporate expenses were $5.4 million for the year ending June 30, 1996 as
compared to $4.4 million for the year ended June 30, 1995, an increase of $1.0
million, or 22.7%. This increase resulted from the additional corporate costs,
primarily salaries and benefits, associated with the acquisitions completed
during fiscal 1995 and fiscal 1996. Corporate expenses as a percentage of
revenues decreased slightly from 12.7% during fiscal 1995 to 12.6% during
fiscal 1996.
During fiscal year 1996, the Company decided to sell or close the 19 stores
purchased from ARI, Inc. in February 1995. The decision resulted in a pre-tax
charge of approximately $4.4 million, which included $3.3 million for the
write-off of the goodwill associated with the original acquisition of these
stores, $600,000 for the write-off of store fixtures and equipment, $350,000
for the early termination of store leases, and $150,000 for the accrual of
other costs related to closing these stores. As of June 30, 1996, accrued
expenses included approximately $450,000 related to future costs associated
with these stores, of which $220,000 is expected to be paid in 1997, $94,000
in 1998, $86,000 in 1999 and $50,000 in 2000. Included in the statements of
income for fiscal 1996 and fiscal 1995 are revenues of $1.5 million and
$564,000, respectively, store expenses of $2.4 million and $931,000,
respectively, and amortization expense of $56,000 and $30,000, respectively,
related to these 19 stores. The Company is seeking to restructure its
obligations under the original subordinated note issued to the seller as part
of the acquisition, and has ceased making principal and interest payments
thereon. As a result, the seller has filed a complaint against the Company
alleging, among other things, breach of contract, and is seeking payment of
the balance of the note of $2.6 million, plus accrued interest, punitive
damages and legal fees. As the outcome of this matter cannot be determined at
present, no reduction in the note payable to the seller or any additional
costs to the Company have been recorded. See "Business--Legal Proceedings."
The Company also incurs losses on unprofitable stores which it closes in the
normal course of business. During fiscal 1996 and fiscal 1995, the Company
recorded expenses of $101,000 and $93,000, respectively, which consisted
primarily of the write-off of leasehold improvements associated with closed
locations. In addition, the Company closed seven stores in each of fiscal 1996
and fiscal 1995, in addition to the 19 stores purchased from ARI, Inc.
discussed in the preceding paragraph.
Other depreciation and amortization expenses were $1.9 million for the year
ended June 30, 1996 as compared to $1.6 million for the year ended June 30,
1995, an increase of $300,000, or 18.8%. This increase resulted primarily from
the amortization expense associated with the goodwill recognized as part of
the acquisition of Chex$Cashed, and a full year's amortization of goodwill
associated with the acquisition of Check Mart, Inc.
Interest expense was $3.4 million for the year ended June 30, 1996 as
compared to $2.5 million for the year ended June 30, 1995, an increase of
$900,000, or 36.0%. This increase was primarily attributable to increased
average outstanding Indebtedness to finance acquisitions, from $29.6 million
for fiscal 1995 to $38.5 million for fiscal 1996, and partially offset by a
decrease in the weighted average interest rate from 8.7% for fiscal 1995 to
8.5% for fiscal 1996.
SIX-MONTH PERIOD ENDED JUNE 30, 1994 COMPARED TO THE SIX-MONTH PERIOD ENDED
JUNE 30, 1993 (PREDECESSOR COMPANY)
Total revenues were $14.7 million for the six months ended June 30, 1994 as
compared to $14.4 million for the six months ended June 30, 1993, an increase
of $300,000, or 2.1%. This revenue growth resulted from an increase in same
store revenue growth in both check cashing revenues and government contract
revenues, offset in part by a decrease in other revenues.
35
<PAGE>
Store and regional expenses were $10.2 million for the six months ended June
30, 1994 as compared to $10.1 million for the six months ended June 30, 1993,
an increase of $100,000, or 1.0%. Store and regional expenses as a percentage
of total revenues were 69.5% for the six months ended June 30, 1994 as
compared to 70.5% for the six months ended June 30, 1993. The decrease
resulted from management's continued emphasis on cost control at the store
level.
Salaries and benefits were $4.3 million for the six months ended June 30,
1994 as compared to $4.2 million for the six months ended June 30, 1993, an
increase of $100,000, or 2.4%. This increase was due primarily to the addition
of one store during the 1994 six-month period.
Occupancy expense remained stable at $1.3 million for both six-month periods
ended June 30, 1994 and 1993. While the total number of stores in operation
increased by one store during the period, one store was closed in Pittsburgh,
while two additional stores were opened in Cleveland, which in the aggregate
resulted in no additional occupancy costs.
Depreciation expense was $500,000 for the six months ended June 30, 1994 as
compared to $600,000 for the six months ended June 30, 1993, a decrease of
$100,000, or 16.7%. This decrease was due to certain store equipment becoming
fully depreciated during 1993.
Other store and regional expenses were $4.1 million for the six months ended
June 30, 1994 as compared to $4.0 million for the six months ended June 30,
1993, an increase of $100,000, or 2.5%. This increase was due to the net
addition of only one store during the 1994 period.
Corporate expenses were $2.3 million for the six months ended June 30, 1994
as compared to $2.4 million for the six months ended June 30, 1993, a decrease
of $100,000, or 4.2%. Corporate expenses as a percentage of revenues were
15.8% for the six months ended June 30, 1994 as compared to 16.4% for the six
months ended June 30, 1993, due to stable corporate expenses on a rising
revenue base.
Other depreciation and amortization expenses were $300,000 for the six
months ended June 30, 1994 as compared to $800,000 for the six months ended
June 30, 1993, a decrease of $500,000, or 62.5%. This decrease resulted
primarily from the full amortization of the Company's non-compete contract
with the predecessor majority shareholder during 1993.
Interest expense was $700,000 for the six months ended June 30, 1994 as
compared to $800,000 during the six months ended June 30, 1993, a decrease of
$100,000, or 12.5%. This decrease was primarily attributable to a reduction in
outstanding indebtedness resulting from scheduled principal payments on the
Company's term loan under the Existing Credit Facility.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal sources of cash are from operations, borrowings
under its credit facilities and sales of Holdings Common Stock. The Company
anticipates its principal uses of cash will be to provide working capital,
finance capital expenditures, meet debt service requirements and finance
acquisitions. For the fiscal years ending June 30, 1995 and 1996 and the six
months ended June 30, 1993 and 1994, the Company had net cash provided by
(used in) operating activities of $4.4 million, $3.7 million, ($288,000) and
$1.6 million, respectively, and used $9.6 million, $8.2 million, $523,000, and
$756,000, respectively, for purchases of property and equipment related to
existing stores, recently acquired stores, investments in technology, and
acquisitions. For the three months ended September 30, 1995 and 1996, the
Company had net cash provided by operating activities of $2.9 million and $4.0
million, respectively and used $35.6 million and $6.8 million, respectively
for acquisitions and purchases of property and equipment related to existing
stores. The acquisitions were financed through borrowings provided under the
Company's Existing Credit Facility and issuance of Holdings Common Stock. The
Company's total budgeted capital expenditures, excluding acquisitions, are
currently anticipated to aggregate approximately $1.0 million during its
fiscal year ending June 30, 1997, consisting of $400,000 for relocation and
remodeling costs for certain existing stores and approximately $600,000 to
open up to 19 new kiosk stores in 7-Eleven locations pursuant to the Company's
contractual agreements with The Southland Corporation. The actual amount of
capital expenditures will depend in part on the number of new stores acquired
and the number of stores remodeled. In addition, the Company intends to spend
up to $2.0 million over the next two years to purchase the equipment necessary
to implement a point-of-sale system.
36
<PAGE>
The Company has historically financed its acquisitions and other capital
requirements through bank debt, seller subordinated debt and proceeds from the
sale of Holdings Common Stock.
The Offering generated gross proceeds of $110.0 million which was used to
repay all of the Company's existing indebtedness under the Existing Credit
Facility, to fund the Money Mart, Cash-N-Dash and C&C acquisitions, and to pay
related fees and expenses. The Company intends to use the remaining proceeds
for general corporate purposes, including potential future acquisitions. See
"Capitalization." The repayment of substantially all of the Company's existing
Indebtedness will result in an extraordinary loss, net of taxes, in the three
months ended December 31, 1996 of approximately $2.0 million. This loss
results from the write-off of the deferred financing costs associated with the
Company's Existing Credit Facility.
On September 30, 1996, the outstanding Indebtedness under the Existing
Credit Facility was $71.4 million. In addition, on September 30, 1996, seller
subordinated notes and other Indebtedness aggregating $3.1 million were
outstanding. Excess operating cash payments were due under the Existing Credit
Facility after the end of each fiscal year. Such excess operating cash
payments reduce future quarterly principal payments on a pro-rata basis.
The Company did not meet certain financial covenants as of June 30, 1996 under
the Existing Credit Facility due to the loss on the store sales and disposals
during fiscal year 1996. This condition was waived by the lender through
September 30, 1996. The covenants were amended under the Existing Credit
Facility, and the Company was in compliance with all financial covenants under
the Existing Credit Facility at September 30, 1996.
On August 8, 1996, the Company acquired all of the outstanding stock of
AnyKind for $31.0 million, consisting of $29.0 million in cash and the
issuance of shares of Holdings Common Stock. On August 28, 1996, the Company
acquired the assets associated with the operations of ABC for $6.0 million in
cash. The Company also funded the working capital requirements of AnyKind and
ABC, which amounted to $6.0 million and $1.5 million, respectively.
In order to finance these acquisitions, Holdings issued shares of Holdings
Common Stock for net proceeds of $21.7 million, which were contributed to the
Company. In addition, the Company amended and restated its Existing Credit
Facility to provide for $35.0 million additional borrowing availability. The
Company used a portion of the proceeds from the Equity Transaction to fund the
acquisitions of AnyKind and ABC and to pay related fees and expenses. The
Company intends to use the remaining proceeds for general corporate purposes,
including potential future acquisitions.
Simultaneously with the consummation of the Offering, the Company entered
into a New Revolving Credit Facility, which the Company expects to use
primarily for working capital needs. The New Revolving Credit Facility allows
borrowings in an amount not to exceed the lesser of $25.0 million or a
borrowing base as set forth in the New Revolving Credit Facility. Amounts
outstanding under the New Revolving Credit Facility bear interest at the
Company's option of either (i) 0.50% plus the agent's alternative reference
rate or (ii) 1.75% plus the agent's reserve adjusted Eurodollar rate and are
secured by a first lien on substantially all of the cash and accounts
receivable of the Company and each of its domestic subsidiaries, as well as on
all of the capital stock of the Company's domestic subsidiaries and on 65% of
the capital stock of the Company's Canadian subsidiaries. The Company had
$25.0 million of unborrowed availability under the New Revolving Credit
Facility immediately following the consummation of the Offering.
Upon consummation of the Offering (and the application of the net proceeds
therefrom), the Company will be highly leveraged, and borrowings under the New
Revolving Credit Facility will increase the Company's debt service
requirements. Management believes that, based on current levels of operations
and anticipated improvements in operating results, cash flows from operations
and borrowings available under the New Revolving Credit Facility will enable
the Company to fund its liquidity and capital expenditure requirements for the
foreseeable future, including scheduled payments of interest on the Notes and
payment of interest and principal on the Company's other Indebtedness. See
"Risk Factors--Substantial Leverage; Ability to Service Outstanding
Indebtedness." There can be no assurance, however, that the Company's business
will generate sufficient cash flow from operations or that future borrowings
will be available under the New Revolving Credit Facility in an amount
sufficient to enable the Company to service its Indebtedness, including the
Notes, or to make anticipated capital expenditures. It may be necessary for
the Company to refinance all or a portion of the
37
<PAGE>
principal of the Notes on or prior to maturity, under certain circumstances,
but there can be no assurance that the Company will be able to effect such
refinancing on commercially reasonable terms or at all.
INCOME TAXES
The Company's effective tax rates for fiscal 1996 and 1995 were (37.0)% and
64.6%, respectively. The effective rate differs from the federal statutory
rate of 34% due to state taxes and non-deductible goodwill amortization which
resulted from the June 30, 1994 acquisition of the Company. The fiscal 1996
effective tax benefit rate is less than the fiscal 1995 tax rate due to the
reversal of the valuation allowance on the Company's gross deferred tax asset
during fiscal 1996. The Company had no valuation allowance recorded against
deferred tax assets at June 30, 1996. Realization of the gross deferred tax
asset is dependent on generating sufficient taxable income prior to the
expiration of the loss carryforwards. Although realization is not assured,
management has determined, based on the Company's history of earnings and its
expectation for the future, that taxable income of the Company will more
likely than not be sufficient to fully utilize its deferred income tax assets.
The amount of the deferred tax asset considered realizable, however, could be
reduced in the near term if estimates of future taxable income during the
carryforward period are reduced.
The Company's effective tax rates for the three months ended September 30,
1996 and 1995 were significantly greater than the federal statutory rate of
34% due to non-deductible goodwill amortization and state taxes. The effective
rate for the three months ended September 30, 1996 was less than the effective
rate for the three months ended September 30, 1995, due to an increase in pre-
tax income from $14,000 for the three months ended September 30, 1995 to
$298,000 for the three months ended September 30, 1996.
The Company's effective tax rates for the six months ended June 30, 1994 and
1993 were 16.0% and 28.1%, respectively. The effective rate differs from the
federal statutory rate of 34% due to state taxes, non-deductible goodwill
amortization and the utilization of the Company's net operating loss
carryforward. The effective tax rate for the six months ended June 30, 1994
was less than for the six months ended June 30, 1993 due to state taxes.
SEASONALITY AND QUARTERLY FLUCTUATIONS
The Company's business is seasonal due to the impact of several tax-related
services including cashing tax refund checks. Historically, the Company has
generally experienced its highest revenues and earnings during its third
fiscal quarter ending March 31 when revenues from these tax-related services
peak. Due to the seasonality of the Company's business, results of operations
for any fiscal quarter are not necessarily indicative of the results of
operations that may be achieved for the full fiscal year. In addition,
quarterly results of operations depend significantly upon the timing and
amount of revenues and expenses associated with the addition of new stores.
IMPACT OF INFLATION
The Company believes that the results of its operations are not dependent
upon the levels of inflation.
RECENT ACCOUNTING PRONOUNCEMENTS
The Company adopted the provisions of Statements of Financial Accounting
Standards ("SFAS") 121, "Accounting for the Impairment of Long-Lived Assets
and For Long-Lived Assets to be Disposed Of" for the fiscal year ending June
30, 1997. The adoption of this standard has not had a material impact on the
Company's financial statements.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
Portions of this Prospectus include forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act. Although the Company believes that the expectations reflected in such
forward-looking statements are based upon reasonable assumptions, the Company
can give no assurance that its expectations will be achieved. Important
factors that could cause actual results to differ materially from the
Company's expectations are disclosed in conjunction with the forward-looking
statements included herein ("Cautionary Disclosures"). See "Risk Factors."
Subsequent written and oral forward-looking statements attributable to the
Company or persons acting on its behalf are expressly qualified in their
entirety by the Cautionary Disclosures.
38
<PAGE>
BUSINESS
GENERAL
The Company is a consumer financial services company operating the second
largest check cashing store network in the United States and the largest such
network in Canada. The Company provides a diverse range of consumer financial
products and services primarily consisting of check cashing, money orders,
money transfers, consumer loans, insurance and bill payment. Certain stores
also serve as distribution centers for public assistance benefits and food
stamps under government contracts. On a pro forma basis as of September 30,
1996, the Company has a total network of 426 stores in 14 states, the District
of Columbia and Canada, including 319 Company-owned stores with revenues for
the fiscal year ended June 30, 1996 and for the three months ended September
30, 1996 of $91.7 million and $22.2 million, respectively, and with Adjusted
EBITDA for the fiscal year ended June 30, 1996 and for the three months ended
September 30, 1996 of $21.4 million and $5.0 million, respectively.
The Company's primary customers are working, lower-income individuals and
families who require basic consumer financial services and are under-served by
traditional retail banking networks. The increased expense and decreased
availability of traditional retail banking services have left an increasing
number of individuals and families (estimated at 20% of the adult population)
without banking relationships. Management believes that growth in the lower-
income segment of the population combined with the decline of traditional
retail banking services provides the Company with significant growth
opportunities.
The Company's stores currently operate under the following locally
established brand names: ABC Check Cashing, Almost-A-Banc, AnyKind Check
Cashing Centers, C&C Check Cashing, Cash-N-Dash, Check Mart, Chex$Cashed,
Financial Exchange, Money Mart, Quikcash, QwiCash and The Service Centers.
INDUSTRY OVERVIEW
United States
The check cashing industry in the United States is highly fragmented,
consisting of approximately 5,400 stores as of July 1996, an increase from the
approximately 1,350 national listings in 1986 according to American Business
Information, Inc. In contrast to the domestic market, the Canadian check
cashing industry is less fragmented. Money Mart is the largest check cashing
store network in Canada accounting for 55% of the total number of check
cashing stores. The Company believes it is one of only four U.S. check cashing
store networks that have more than 100 locations, the remaining being local
store networks and single-unit operators. The Company believes that industry
growth has been fueled by several demographic and socioeconomic trends,
including a decline in the number of households with bank deposit accounts, an
increase in the number of low-paying service sector jobs and an overall
increase in the lower-income population.
The number of families and individuals that hold bank, thrift or savings and
loan deposit accounts has declined dramatically over the past fifteen years.
In a recent study, a leading consumer magazine estimated that approximately
20% of the adult population does not maintain a banking relationship. The
study attributes this decline to a number of factors, including the inability
of many families and individuals to maintain the minimum account balance
required by many banks and thrifts, an increase in fees on deposit accounts
with small balances and an increase in bank branch closings in lower-income
population areas.
The increase in the fees charged by banks on deposit accounts over time has
contributed to the decline in the number of families and individuals holding
such accounts. The U.S. Public Interest Research Group has conducted a
national study which shows that, from 1993 to 1995, the annual cost to
maintain a regular checking account grew by 10% to $202, monthly maintenance
fees increased 22% to $7.11, average monthly balance requirements to avoid
regular checking fees rose 30% to $1,242, and the minimum opening balance
required for accounts rose 37% to $69. The report states that these increased
costs keep accounts out of reach of many fixed and lower income consumers. In
general, the findings indicate that banks have increased their fees
significantly on a real and inflation-adjusted basis.
Many banks have elected over time to close their less profitable or lower
traffic locations. These closings have tended to occur in lower-income, urban
and minority neighborhoods. As banks continue this trend, wage earners in
these lower-income areas will have fewer, if any, convenient alternatives
other than local check cashing stores to perform basic financial transactions.
39
<PAGE>
Lower-income individuals represent a large and rapidly growing segment of
the U.S. population. The 1993 Bureau of Labor Statistics Consumer Expenditure
Survey revealed that 30% of U.S. four-person households reported to have
earned annual before-tax income of less than $15,000. This low-wage
population, from which the Company draws most of its customers, is the fastest
growing segment of the workforce. As the low-wage population continues to
grow, the Company believes that this population will increasingly rely on the
check cashing industry as the primary source for their consumer financial
products and services.
Canada
In contrast to the domestic market, the Canadian check cashing market is
significantly less fragmented, with Money Mart's 143 owned and franchised
stores accounting for 55% of the total number of check cashing stores in
Canada. A survey conducted for Money Mart shows that a significant number of
Money Mart customers choose to patronize Money Mart's locations because of the
convenient operating hours, fast and courteous service and broad product
offerings.
Growth and Consolidation
Management believes that significant opportunities for growth exist in the
check cashing industry as a result of (i) the growth of the lower-income
population sector, (ii) the failure of commercial banks and other traditional
financial service providers to address the needs of lower-income individuals
and (iii) the trend toward consolidation in the check cashing industry.
Management believes that as the lower-income population segment increases, and
as trends within the retail banking industry create a less accessible
environment for these members of society, the check cashing industry will
realize a significant increase in demand for its products and services.
However, despite these growth dynamics, the Company believes that the industry
is entering a period of consolidation. The Company believes that this
consolidation trend has resulted from a number of factors, including (i) the
economies of scale available to larger operators, (ii) the use of technology
as a means to better serve customers and control large store networks, (iii)
the inability of smaller operators to form the alliances necessary to deliver
new products and (iv) increased licensing and regulatory burdens. This trend
toward consolidation should provide the Company, as one of the largest store
networks, with opportunities for continued growth through selective
acquisitions.
COMPETITIVE STRENGTHS
The Company believes that it has the following competitive strengths:
Store locations in favorable demographic areas. The Company has carefully
chosen states and metropolitan areas within those states with growing low-
income populations. Within the markets served by the Company, the Company's
stores are located in desirable locations near its targeted customer base.
Management adheres to a strict set of market survey and location guidelines
when selecting acquisition targets and new store sites. The Company's store
base is a mix of urban sites, which are located in high-traffic shopping
areas, and suburban sites, which are located in strip malls near multi-family
housing complexes. In the future, the Company plans to emphasize suburban
strip mall locations, particularly in the southeastern and western parts of
the United States.
High-quality customer service. As part of its retail and customer-driven
strategy, the Company focuses on providing friendly customer service in a
clean and attractive environment. Operating hours vary by location, but are
typically extended and designed to cater to those customers who, due to work
schedules, cannot make use of "normal" banking hours. As part of its employee
training program, the Company's employees are encouraged and instructed to
treat customers in a friendly and courteous manner, which management believes
results in repeat business.
Broad offering of products and services. All Company stores offer a wide
range of products and services to meet the demands of their locale, including
check cashing, money orders, money transfers, consumer loans, insurance and
bill payment. The Company also offers a variety of ancillary products,
including Cash 'Til Payday loans, photo ID, lottery tickets, electronic tax
filing, photocopy service, long-distance cards and fax services.
40
<PAGE>
Economies of scale. As the second largest check cashing store network in the
United States, the Company has reached a size that enables it to benefit from
economies of scale and to negotiate more favorable contracts with its
suppliers. In addition, the Company's market position enables it to enter into
favorable relationships with strategic partners like Western Union and The
Southland Corporation. Management believes that the Company's size also allows
it to gain greater access to capital.
Management expertise. In addition to the Company's senior management, the
regional managers of the Company have extensive experience and expertise in
the check cashing industry, which provides the Company with a competitive
advantage. Furthermore, the Company has been largely successful in retaining
the operational managers employed by the companies acquired in the
Acquisitions.
Well diversified credit risk. On a pro forma basis, for the fiscal year
ended June 30, 1996 and for the three months ended September 30, 1996, the
Company cashed 7.2 million checks and 1.8 million checks, respectively with an
average face value of $262 and $281, respectively. As a result, management
believes that the risk that the Company will sustain a material credit loss
related to a single transaction or series of transactions is minimal.
STRATEGY
The Company's business strategy is to capitalize on its competitive
strengths by increasing the revenues and profitability of its existing
operations and by growing through the acquisition of check cashing store
networks and the development of the kiosk store format. Key elements of the
Company's business strategy include:
Maintain and instill a customer-driven retail philosophy. The Company has
focused on increasing its customer base through a service-oriented approach
designed to meet the needs of working, lower-income individuals and families
in need of basic consumer financial services. The Company believes it has
differentiated itself from its competitors by focusing on customer service.
The Company offers extended operating hours in clean, well-lit and convenient
store locations to enhance appeal and stimulate store traffic. The Company's
research indicates that, although approximately 30% of its customers have bank
accounts, its customers prefer immediate access to cash without waiting for
check clearance. In addition, the Company believes that many of its customers
find great value in their ability to cash a payroll or government check
immediately, for a fee, at a location within close proximity to their home or
workplace at nearly any time of day. The Company's surveys have indicated that
over 90% of its customers are repeat users of its services. The survey also
indicated that the widespread availability of ATM machines does not alter a
customer's decision to "bank" at Company locations. The Company uses locally-
targeted advertising, including television and radio, to promote awareness of
its products and its customer service. The Company will continue to develop
ways to improve service to its customers.
Introduce new products and services. The Company has developed a "one-stop"
shop concept to offer many consumer financial products and services not
otherwise available to its targeted customer base. The Company believes that
its customers enjoy the convenience of those services offered by the Company
other than check cashing. The Company is currently in the process of a
nationwide roll-out of its Cash 'Til Payday loan program and will continue to
expand the product and service offerings of its newly acquired check cashing
store networks. In addition, the Company intends to seek alliances with other
financial institutions and non-financial organizations, like Western Union, to
offer additional products to its customers.
Grow through targeted acquisitions and kiosk openings. The Company has grown
significantly since June 1994, primarily through nine acquisitions of an
aggregate of 225 stores. Management will continue to seek opportunistic
acquisitions of well-managed check cashing store networks located in areas
with favorable demographics, including the southeastern and western parts of
the United States, as well as profitable check cashing stores in areas that
complement the Company's existing geographic markets. The Company has also
purchased six existing kiosks in Dallas, Texas and currently operates five
existing kiosks in Austin, Texas, in each case pursuant to an agreement with
The Southland Corporation. In addition, pursuant to its agreement with The
Southland Corporation, the Company plans to open 19 additional consumer
financial service kiosks that offer
41
<PAGE>
check cashing and other products and services. These kiosks, which will be
located in existing 7-Eleven convenience stores, are expected to be opened in
the near future.
Capitalize on economies of scale. The Company is well positioned to take
advantage of the current trend toward consolidation in the check cashing
industry. The Company expects to continue to reduce its per store cost for bad
debt collection, security, armored car services, employee training, management
information systems, and other operating expenses. The Company will continue
to seek cost reductions from its current service suppliers as its check
cashing market share increases through store network acquisitions and kiosk
openings. Furthermore, the Company expects to be able to capitalize on its
market position by developing strategic alliances with other financial
institutions and non-financial organizations.
Manage credit risk. The Company's check cashing service consists of high
volumes of small individual transactions requiring credit risk decisions on
individual checks. On a pro forma basis, for the fiscal year ended June 30,
1996, the Company cashed 7.2 million checks with an average face amount of
$262. The Company actively manages its customer risk profile in order to
maximize check cashing revenues while maintaining net write-offs within a
targeted range. As a result, management believes that the risk that the
Company will sustain a material credit loss related to a single transaction or
a series of transactions is minimal. On a pro forma basis, for the fiscal year
ended June 30, 1996, net write-offs as a percentage of face amount of checks
cashed were 0.16%.
Maintain existing base of government contracts. The Company intends to
continue to distribute public assistance benefits pursuant to its existing
contracts with various state and local governments. In this type of contract,
the Company provides continuous, uninterrupted operation of a benefits
transfer system during normal business hours in various locations, including
its check cashing stores, so as to distribute public assistance benefits. The
Company is not, however, planning to further expand this part of its business
and expects government revenue as a percentage of total revenue to decline in
the future.
CUSTOMERS
Based upon a consumer survey conducted in select markets for DFG in 1995 and
the Company's operating experience, the Company believes that its core
customer group is comprised of individuals who are between the ages of 18 and
49, rent their home, are employed and have annual household incomes of under
$35,000. The consumer survey indicated that over 90% of the Company's
customers in the surveyed markets were repeat customers and that over 50% had
used the Company's services more than ten times. Of those customers surveyed,
85% were employed. The Company believes that consumers value attention to
customer service, and their choice of check cashing stores is influenced by
the Company's convenient locations and extended operating hours.
Based on a customer survey performed for Money Mart in 1995, the Company
believes that the demographics of Money Mart customers are similar to those of
the Company's existing U.S. customers. The survey found that approximately 80%
of Money Mart's customers have annual incomes below $30,000 and 75% are under
the age of 35. Although 65% of the surveyed customers have a bank account,
these consumers continue to use Money Mart due to the fast and courteous
service and the stores' extended operating hours.
DFG believes that many of its customers are unskilled workers or independent
contractors who receive payment on an irregular basis and generally in the
form of a check. The Company's core customer group lacks sufficient income to
accumulate assets or to build savings. These customers rely on their current
income to cover immediate living expenses and cannot afford the delays
inherent in waiting for checks to clear through the commercial banking system.
Furthermore, the Company believes that many of its customers use its check
cashing services in order to gain immediate access to cash without having to
maintain a minimum balance in a checking account and incur the cost of
maintaining a checking account. In addition, although research conducted for
the Company indicates that approximately 30% of its customers do have bank
accounts, these customers use check cashing stores because they find the
locations and extended operating business hours of the Company's stores more
convenient than those of banks and value the ability to receive cash
immediately, without waiting for a check to clear.
42
<PAGE>
PRODUCTS AND SERVICES
The Company's Retail Stores Division is responsible for DFG's check cashing
store networks; the Merchant Services Division manages electronic benefits
distribution networks in New York State and Pennsylvania.
RETAIL STORES DIVISION
DFG's check cashing stores provide a broad range of consumer financial
products and services to its customers at convenient locations with extended
operating hours. Customers typically use DFG's stores to cash checks (payroll,
government and personal), receive government benefits and utilize one or more
of the additional financial services available at most locations.
Check Cashing
Customers may cash all types of checks at any DFG location, including
payroll checks (approximately 50% of all checks cashed), government checks
(26%) and personal checks (24%). In exchange for a verified check, DFG
customers receive cash immediately, for a fee, and are not required to wait
several days for the check to clear. Both the customer's identification and
the validity of the check are verified by multiple sources pursuant to the
Company's standard verification procedures before any cash is distributed.
Customers are charged a fee for this service (typically a small percentage of
the face value of the check) which varies depending upon the type of check
cashed and whether or not the customer has a previous record of cashing checks
at that location. For the twelve months ended June 30, 1996, check cashing
fees averaged approximately 2.8% of check face value, and on a pro forma basis
for the Acquisitions, check cashing fees averaged approximately 2.9% of check
face value.
Check cashing fees are typically based on the risk profile of both the
customer and the type of check. Government checks are considered to be the
most secure. The Company, therefore, charges only a small fee of approximately
1.0% of the face amount to cash these checks. Cashing payroll checks involves
more risk, primarily due to the higher incidence of stolen checks with forged
endorsements, stop payments and insufficient funds. Fees for payroll checks
range from 1.0% to 2.5% of the face amount. Personal checks generally carry
the highest level of risk. Therefore, before cashing a personal check, the
teller is required to perform several identification cross checks. Fees on
personal checks range generally from 1.0% to 6.0% of the face amount.
The following chart presents a summary of check cashing data for the periods
indicated below:
CHECK CASHING FEE SUMMARY
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED
---------------------------------------- JUNE 30,
1991 1992 1993 1994
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Face amount of checks
cashed................. $231,173,000 $267,009,000 $307,523,000 $160,681,000
Number of checks
cashed................. 933,610 1,202,454 1,307,768 662,855
Average face amount per
check.................. $ 247.61 $ 222.05 $ 235.15 $ 242.41
Average fee per check... $ 6.27 $ 6.59 $ 6.53 $ 6.78
Average fees as a % of
face amount............ 2.53% 2.97% 2.78% 2.80%
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED JUNE 30, SEPTEMBER 30,
------------------------------------------ ----------------------------------------
PRO FORMA PRO FORMA
1995 1996 1996 1995 1996 1996
------------ ------------ -------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Face amount of checks
cashed................. $510,771,000 $728,123,000 $1,893,885,000 $166,984,000 $313,385,000 $507,700,000
Number of checks
cashed................. 2,132,006 3,051,037 7,236,000 686,000 1,090,000 1,810,000
Average face amount per
check.................. $ 239.57 $ 238.65 $ 261.73 $ 234.42 $ 287.51 $ 280.50
Average fee per check... $ 6.45 $ 6.65 $ 7.65 $ 6.26 $ 7.10 $ 7.30
Average fees as a % of
face amount............ 2.69% 2.79% 2.93% 2.57% 2.47% 2.60%
</TABLE>
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<PAGE>
Historically, the Company has used price promotions to increase the number
and average face amount of the checks it cashes. Management believes that the
volume gains from selective price promotions more than offset any unit price
declines. For example, in 1993, the average fee fell from 3.0% to 2.8% of the
face amount of the check, but the average face amount of checks cashed
increased 5.9%, which translated into an increase in check cashing fee
revenue. In fiscal 1996, check cashing activities increased, pushing up the
average fee per check to $6.65, or 2.8% of the face amount.
If a check cashed by the Company is not paid for any reason, the full face
value of the check is recorded as a loss in the period during which the check
was returned. The check is then sent to the store for collection and, if after
30 days it still remains uncollected, then it is sent to the Company's
internal collections department, which contacts the maker and/or payee of each
returned check and, if necessary, commences legal action. The collections
department currently employs eight people who work full-time collecting
returned items. During fiscal 1996, approximately 69.0% of the face value of
checks returned during that year was ultimately collected by the Company and,
on a pro forma basis, approximately 74.3% of the face value of checks returned
during that year was ultimately collected.
The following chart presents a summary of the Company's returned check
experience for the periods indicated below:
RETURNED CHECK EXPERIENCE
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED
------------------------------ JUNE 30,
1991 1992 1993 1994
-------- -------- ---------- ----------
<S> <C> <C> <C> <C>
Face amount of returned checks..... $695,000 $540,000 $1,085,000 $621,000
Collections on returned checks..... 373,000 195,000 723,000 365,000
Net write-offs of returned checks.. 322,000 345,000 362,000 256,000
Collections as a percentage of
returned checks................... 53.7% 36.0% 66.7% 58.8%
Net write-offs as a percentage of
check cashing revenues............ 5.5% 4.4% 4.2% 5.7%
Net write-offs as a percentage of
face amount of checks cashed...... 0.14% 0.13% 0.12% 0.16%
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED JUNE 30, SEPTEMBER 30,
----------------------------------- --------------------
PRO FORMA
1995 1996 1996 1995 1996
---------- ---------- ----------- -------- ----------
<S> <C> <C> <C> <C> <C>
Face amount of returned
checks................. $2,006,000 $3,763,000 $11,915,000 $722,000 $1,645,000
Collections on returned
checks................. 1,203,000 2,598,000 8,852,000 416,000 1,071,000
Net write-offs of
returned checks........ 803,000 1,165,000 3,063,000 306,000 574,000
Collections as a
percentage of returned
checks................. 60.0% 69.0% 74.3% 57.6% 65.1%
Net write-offs as a
percentage of check
cashing revenues....... 5.8% 5.7% 5.5% 7.1% 7.4%
Net write-offs as a
percentage of face
amount of checks
cashed................. 0.16% 0.16% 0.16% 0.18% 0.18%
</TABLE>
Other Services and Product Extensions
In addition to check cashing, DFG customers are able to choose from a
variety of products and services when conducting business at the Company's
check cashing locations. These services include lottery ticket sales,
electronic tax filing (primarily used by customers to secure a "refund
anticipation loan" from the Company), phone cards, transportation passes and
utility bill payment services. A survey of the Company's customers by an
independent third party revealed that over 50% of customers use other services
in addition to check cashing. Management believes that providing these
services helps to implement the Company's customer-driven strategy by creating
a "one-stop shop" atmosphere for its customers.
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Among the products and services other than check cashing offered by the
Company are the following:
. Money Orders--DFG's check cashing stores exchange money orders for cash
and/or checks for a minimal fee, with an average fee and face amount of
$0.41 and $97, respectively, for the fiscal year ended June 30, 1996.
Money orders are typically used as a means of payment of rent and
utility bills for customers who do not have checking accounts. For the
twelve months ended June 30, 1996, DFG's check cashing stores sold a
total of 2.8 million money orders, generating total money order revenues
of $1.1 million. By December 31, 1996, the Company plans to exclusively
offer Western Union money orders at all of its check cashing stores.
. Money Transfers--At DFG's check cashing stores, customers can transfer
funds to any location providing Western Union money transfer services.
Western Union currently has 23,000 agents in more than 130 countries
throughout the world. DFG receives a percentage of the fee charged by
Western Union for the transfer as its commission. For the twelve months
ended June 30, 1996, the Company's check cashing stores executed 284,000
wire transfers and generated total wire transfer fees of $1.5 million.
The Company has recently begun offering the following financial products as
part of its focus on becoming a full service provider of consumer financial
products and services, in addition to its existing basket of products and
services:
. Cash 'Til Payday Loan Program--DFG acts as an agent to offer unsecured
short-term loans to customers with established bank accounts and
verifiable employment. Loan sizes are up to $200, with terms of no
longer than 30 days.
. Personal Lines of Insurance--DFG has been conducting pilot marketing
programs with several insurance underwriters to provide life, accidental
death and dismemberment, and renters or "contents" insurance to its
customers. Under certain programs, the first of which began in February
1996, DFG acts as a remittance agent for non-qualifying life, accidental
death, and disability insurance. In other areas, licensed agents from
the carriers sell policies in the Company's stores. Customers can pay
for the policy in full or in periodic installments which may be made at
the Company's stores. DFG receives a percentage of the premium from the
underwriter for acting as remittance agent.
Kiosks
The Company operates 80 to 100 square-foot kiosks within pre-existing
convenience stores. These kiosks will eventually offer the same services as
stand-alone Company stores. DFG's management considers the key advantages of
the kiosk format to include: shared overhead costs, pooled advertising and
signage costs, and access to high-traffic areas and a potentially expanded
market.
On April 30, 1996, DFG signed an agreement with The Southland Corporation
(the "Southland Agreement") to purchase and operate kiosks within The
Southland Corporation's 7-Eleven stores. Pursuant to the Southland Agreement,
(i) DFG purchased six existing kiosks in Dallas, Texas and operates five
existing kiosks in Austin, Texas and (ii) DFG agreed to develop, construct and
operate an additional 19 kiosks in 7-Eleven stores located in the Dallas/Fort
Worth area. Under certain circumstances, the Company will be able to open an
additional 100 kiosks within existing 7-Eleven stores on the same or similar
terms as those that govern its existing kiosks.
Government Benefits Distribution
In addition to the other consumer financial products and services offered by
the Company, DFG stores in Philadelphia, Pittsburgh, Detroit, Southern
California, Washington and Ohio provide for the distribution of public
assistance benefits and food coupons. The Company believes that many state and
local governments have elected to employ this method of distribution as a
means of reducing administrative overhead and fraud which is often prevalent
when benefits are issued through the mail. DFG's government contracts require
the Company to
45
<PAGE>
provide continuous, uninterrupted operation of a benefits transfer system
during normal business hours in its check cashing locations. The Company is
paid on a per transaction basis by the contracting governmental agency. The
initial terms of these contracts range from one to five years and, in some
cases, provide the government agencies the opportunity to extend the contract
for additional periods. With only one exception, each government contract to
provide these types of services has been extended at every renewal date since
1981.
The following chart outlines the terms and performance of DFG's existing
government contracts:
DFG'S EXISTING GOVERNMENT CONTRACT BUSINESS
FOR THE TWELVE MONTHS ENDED JUNE 30, 1996
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
NUMBER OF 1996 GOVT. 1996 GOVERNMENT
STORES UNDER CONTRACT TOTAL MARKET PERCENTAGE CONTRACT CONTRACT
MARKET CONTRACT REVENUE REVENUES OF TOTAL SINCE EXPIRES(1)
------ ------------ ---------- ------------ ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Philadelphia, PA........ 20 $6,192 $ 9,226 67.1% 1979 1998
Michigan(2)............. 14 1,461 2,070 70.6% 1985 1999
Ohio(3)................. 16 836 2,936 28.5% 1983 1996
California(2)........... 13 711 10,103 7.0% 1984 1997
Pittsburgh, PA.......... 11 662 2,536 26.1% 1990 1998
Washington(4)........... 9 345 2,844 12.1% 1989 --
</TABLE>
- --------
(1) As indicated above, although the current contracts expire on the date
indicated, it has been the Company's experience that such contracts are
typically renewed prior to their expiration. Certain of the contracts,
however, have no remaining option periods.
(2) In Michigan and California, the Company has contracts with two individual
counties. The expiration date in the chart indicates the earlier
expiration date of the two contracts.
(3) In Ohio, the Company has contracts with four individual counties. The
expiration date in the chart indicates the earliest expiration date of the
four contracts.
(4) The Washington contract continues until terminated by either party as
provided in the contract.
Although the Company believes that government contracts will comprise a
lower percentage of the Company's future revenues, it still plans to devote
resources to bidding for the renewal of its existing government contracts. The
Company has a very successful track record with respect to retaining
government contracts. With one exception, the Company has retained every
government contract on which it has rebid. Since past rebid proposals are
publicly available, the Company analyzes prior biddings and uses the
information to competitively rebid the current proposal. The Company believes
that these efforts, combined with its track record, will enable it to retain
its existing government contracts. However, there can be no assurance that the
Company will in fact be able to retain its existing government contracts.
DFG believes that, over the next few years, a number of state and local
government agencies will install electronic benefits transfer systems designed
to disburse public assistance benefits directly to individuals (sometimes
referred to as "EBT" systems). DFG already provides support and operating
services for the distribution of public assistance benefits pursuant to
contracts with state agencies in both New York State (through a subcontract)
and Pennsylvania. See "--Products and Services--Merchant Services Division."
Given its experience in providing such services, the Company may seek to
provide similar services for newly-installed EBT systems. However, the
installation of EBT systems may enable recipients of public assistance
benefits to receive such funds without cashing a government check. Therefore,
there can be no assurance that the installation of such systems will not have
a material adverse effect on the Company's results of operations or financial
condition.
MERCHANT SERVICES DIVISION
The Company's Merchant Services Division provides support and operating
services for the distribution of public assistance benefits through contracts
with state agencies in both New York State and Pennsylvania. EBT systems equip
participating merchants with point-of-sale ("POS") devices that are on-line
with the contracting
46
<PAGE>
agency's recipient database. In New York, DFG acts as a subcontractor to
Citibank, N.A. ("Citibank") to maintain and service Citibank's network of
electronic government benefits distribution to several hundred merchants
throughout the state. In Pennsylvania, DFG owns, operates, and maintains the
system which electronically distributes public assistance benefits through
fourteen of the Company's check cashing stores in the city of Philadelphia.
New York
In 1988, the State of New York began issuing food stamp benefits through its
Electronic Benefits Issuance and Control System to 330,000 recipients on a
monthly basis through grocery stores and other merchants in 57 counties
outside of New York City. This package of benefits is currently distributed
electronically through POS devices located in over 1,300 grocery, convenience
and check cashing stores. These devices are directly connected to the state's
welfare recipient database and operate in a manner similar to ATM machines by
providing immediate verification when a recipient's magnetically encoded card
is scanned through the system.
Although Citibank provides the POS devices to the merchants, it has little
direct follow-up contact with either the distribution points or the benefits
recipients. DFG operates as a subcontractor to Citibank and is responsible for
monitoring and maintaining the network. The Company employs field agents and
administrative personnel headquartered in Albany, New York to train merchants
in the use of Citibank's POS terminals, monitor merchants for security
compliance and quality control and maintain accounting procedures to reconcile
benefit transactions at each site. The Company is paid on a fee-per-
transaction basis for its services.
Pennsylvania
In Pennsylvania, the Company owns the PenNet System, an EBT system that was
acquired from the Planning Resource Corporation in January 1993. The PenNet
system is operated in conjunction with some of the Company's Philadelphia-
based check cashing stores and certain grocery stores in other parts of the
state in order to assist in the distribution of food coupons and other public
benefits in Pennsylvania.
Within the PenNet system, recipient eligibility is determined at the state
welfare office where magnetic cards are generated and issued to recipients.
Recipient data is initially entered into the PenNet system at the county
assistance offices and is then updated daily at the PenNet data center in
Philadelphia. Recipients visit DFG's check cashing stores and other benefits
issuance sites throughout Philadelphia to receive their benefits, and must
present their magnetic cards to a teller who passes the card through a
scanning device. DFG is paid a monthly fee to operate and support this system.
47
<PAGE>
STORE OPERATIONS
Locations
The following chart sets forth the number of stores in operation as of the
dates indicated:
<TABLE>
<CAPTION>
DFG
------------------------------------------- PRO FORMA
DECEMBER 31, JUNE 30, AS OF
-------------- -------------- SEPTEMBER 30, MONEY SEPTEMBER 30,
MARKETS 1991 1992 1993 1994 1995 1996 1996 MART CASH-N-DASH C&C 1996
------- ---- ---- ---- ---- ---- ---- ------------- ----- ----------- --- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CA
Southern................ 16 20 20 20 19 27 49 0 0 0 49
Northern................ 0 0 0 0 13 13 24 0 32 23 79
PA
Philadelphia............ 21 22 22 22 41 20 25 0 0 0 25
Pittsburgh.............. 12 13 13 12 14 11 11 0 0 0 11
OH
Cleveland............... 17 13 13 13 11 11 26 0 0 0 26
Other Ohio Cities(1).... 5 5 6 8 8 9 8 0 0 0 8
Phoenix, AZ............. 0 0 0 0 0 8 17 0 0 0 17
TX
Dallas.................. 0 0 0 0 0 6 9 0 0 0 9
Austin.................. 0 0 0 0 0 5 5 0 0 0 5
Detroit, MI(2).......... 14 15 15 15 14 13 13 0 0 0 13
Norfolk, VA............. 0 19 19 19 14 14 14 0 0 0 14
Seattle, WA............. 0 0 0 0 9 9 9 0 0 0 9
Salt Lake City, UT...... 0 0 0 0 4 4 4 0 0 0 4
MD/DC................... 0 0 0 0 0 0 4 0 0 0 4
Albuquerque, NM......... 0 0 0 0 3 3 3 0 0 0 3
New Orleans, LA......... 0 0 0 0 0 0 3 0 0 0 3
HI...................... 0 0 0 0 0 0 3 0 0 0 3
WI...................... 0 0 0 0 0 1 1 0 0 0 1
CANADA
Company................. 0 0 0 0 0 0 0 36 0 0 36
Franchised.............. 0 0 0 0 0 0 0 107 0 0 107
--- --- --- --- --- --- --- --- --- --- ---
Total Stores............ 85 107 108 109 150 154 228 143 32 23 426
</TABLE>
- --------
(1) These other cities include Akron, Canton, Youngstown and Cincinnati, Ohio.
(2) Includes a single store located in Kalamazoo, Michigan.
Management adheres to a strict set of market survey and location guidelines
when selecting acquisition targets and new store sites. The Company's store
base is a mix of urban sites, which are located in high-traffic shopping
areas, and suburban locations, which are in strip malls near multi-family
housing complexes. In the future, the Company plans to emphasize suburban
strip mall locations, particularly in the southeastern and western parts of
the United States.
Layout and Facilities
As part of its retail and customer-driven strategy, the Company presents a
clean and attractive environment and an appealing format for its check cashing
stores. DFG's check cashing stores are generally free standing with visible
signage on the storefront. Size varies by location, but the stores are
generally 1,000 to 1,400 square feet with approximately half of that space
allocated to the teller and back office areas. There are typically three to
five teller lanes available for customer transactions.
Operating hours vary by location, but are typically extended and designed to
cater to those customers who, due to work schedules, cannot make use of
"normal" banking hours. A typical store operates from 8:00 A.M. to 8:00 P.M.
during weekdays and Saturdays, and 10:00 A.M. to 5:00 P.M. on Sundays. In
certain locations, the Company operates stores on a 24-hour, seven-days-per-
week basis.
48
<PAGE>
All of the Company's individual stores are leased, generally under leases
providing for an initial multi-year term and renewal terms from one to five
years. The Company generally assumes the responsibility for required leasehold
improvements, including signage, teller partitions, alarm systems, computers,
time-delayed safes and other office equipment. The leases relating to stores
that provide government benefits distribution typically allow for the
termination of a store's lease in the event of the loss of a material
government contract.
Technology
The Company currently has an enterprise-wide transaction processing computer
network. The Company believes that this system has improved customer service
by reducing transaction time and enabling the Company to better manage
returned check losses and comply with regulatory record-keeping and reporting
requirements.
The Company is currently developing and testing a POS transaction processing
system comprised of a networked hardware and software package with integrated
database and reporting capabilities. Management believes that the POS system
will provide its stores with instantaneous customer information, thereby
reducing transaction time and improving the efficiency of the Company's credit
verification process. When implemented, the POS system is expected to enhance
the Company's ability to offer new products and services and to improve its
customer service. The Company believes that it will begin outfitting its
stores with the POS system in fiscal 1997 and intends to spend up to $2.0
million over the next two years to purchase the necessary equipment and
implement the POS system.
Security
All check cashing operations are exposed to two major classes of theft:
robbery and internal theft. DFG management has implemented extensive security
systems, dedicated security personnel and management information systems which
address both areas of potential loss. Management believes that its systems are
among the most effective in the industry. Total net security losses
represented less than 0.5% of both total revenues and total check volume for
the twelve months ended June 30, 1996.
All store employees operate behind bullet-resistant glass and steel
partitions and the back office, safe and computer areas are locked and closed
to customers. Each store's security measures include safes, electronic alarm
systems monitored by third parties, control over entry to teller areas,
detection of entry through perimeter openings, walls, and ceilings and the
tracking of all employee movement in and out of secured areas. In addition, as
security contracts expire and as new stores are opened, the Company is
centralizing its security measures to strengthen and improve its control over
the secured areas. This centralized system includes the following security
measures in addition to those mentioned above: identical alarm systems in all
stores, remote control over alarm systems, arming/disarming and changing user
codes, and mechanically and electronically controlled time-delay safes.
Due to the high volumes of cash, food stamps, and negotiable instruments
handled at the Company's locations, daily monitoring, unannounced audits and
immediate response to irregularities are critical in combating theft and
fraud. The Company has retained the accounting firm of Ernst & Young LLP for
an internal auditing program which includes unannounced store audits at every
store.
ADVERTISING AND MARKETING
The Company is continually surveying and researching its customer trends and
purchasing patterns in order to place the most effective advertising for each
market. The Company's corporate marketing department's promotions typically
include point-of-sale materials, advertising support, and store personnel
instructions on the use of the materials. The Company also arranges
cooperative advertising for its products and services. For example, the
Company does significant cooperative advertising with Western Union. Store
managers are also provided with local store marketing training that sets
standards for promotions and marketing their store on a local level. A
national yellow page company is utilized to place all yellow page advertising
as effectively and prominently as possible. The Company does research into
directory selection to assure effective communication to its target customers.
49
<PAGE>
COMPETITION
The check cashing industry in the United States is highly competitive and
will become even more so as the industry consolidates. American Business
Information, Inc. has reported that as of July 1996, a total of approximately
5,400 check cashing stores were operating in the United States.
DFG, with 426 stores, is the second largest check cashing store network in
the United States. ACE Cash Express, Inc. operates the largest check cashing
store network in the United States, operating 680 stores in 29 states as of
September 6, 1996. The ten largest chains control less than 30% of the total
stores which reflects the fragmented nature of the check cashing industry.
In addition to other check cashing stores in the U.S. and Canada, DFG
competes with banks and other financial services entities, and retail
businesses, such as grocery and liquor stores, which will cash checks for
their customers. Some competitors, primarily grocery stores, do not charge a
fee to cash a check. However, these merchants provide this service to a
limited number of customers with superior credit ratings, and will typically
only cash "first party" checks, or those written on the customer's account and
made payable to the store.
REGULATION
The Company is subject to regulation in several of the jurisdictions in
which it operates, including jurisdictions that regulate check cashing fees,
require prompt remittance of money order proceeds to money order suppliers or
require the registration of check cashing companies. In addition, the Company
is subject to federal and state regulation which requires the reporting and
recording of certain currency transactions and certain of the Company's
operations are also subject to federal and state regulations governing
consumer protection and lending practices.
State Regulation
To date, the regulation of check cashing fees has been restricted to the
state level. The Company is currently subject to fee regulation in two states,
Ohio and California, where regulations set maximum fees for various types of
checks in an attempt to prevent usurious pricing practices. However, the
Company's fees are well below the ceilings currently established in such
states.
The following chart presents a summary of current state fee regulations for
check cashing operations in those states where the Company's check cashing
stores are currently located:
CURRENT CHECK CASHING FEE REGULATIONS
California: Maximum of 3.0% fee for government and payroll checks (3.5%
without specified identification) or $3.00, whichever is
greater. Permits one-time $10.00 fee to issue
identification. Ceiling fees set in 1992.
Ohio: Maximum of 3.0% fee for government checks. Ceiling fees set
in 1993.
The Company operates a total of 129 stores in California and Maryland. These
states are among those that have so-called "prompt remittance" statutes. Such
statutes specify a maximum time for the payment of proceeds from the sale of
money orders to the issuer of such money orders thereby limiting the number of
days or "float" which the Company has use of the money from the sale of such
money orders. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations--Liquidity and Capital Resources."
In addition, certain states, including California, Ohio, Arizona and
Louisiana, have enacted licensing requirements for check cashing stores. Other
states, including Ohio, require the conspicuous posting of the fees charged by
each store. A number of states, including Ohio, also have imposed record
keeping requirements while others require check cashing stores to file fee
schedules with the state.
50
<PAGE>
In Canada, the federal government does not directly regulate the check
cashing industry nor do provincial governments impose any regulations specific
to the industry. The exception is in the Province of Quebec where check
cashing stores are not permitted to charge a fee to cash government checks.
The adoption of check cashing fee regulations and prompt remittance statutes
in additional jurisdictions or the reduction of maximum allowable fees in the
jurisdictions currently regulating check cashing could have an adverse effect
on the Company's business and could restrict the ability of the Company to
expand its operations into certain states. As the Company develops new
products and services in the insurance and consumer finance areas, it may
become subject to additional federal and state regulations governing those
areas.
In addition to fee regulations and prompt remittance statutes, certain
jurisdictions have also (i) placed limitations on the commingling of money
order proceeds and (ii) established minimum bonding or capital requirements.
The Company's consumer lending activities are subject to certain state and
federal regulations, including, but not limited to, regulations governing
lending practices and terms, such as truth in lending and usury laws.
There can be no assurance that the Company will not be materially adversely
affected by legislation or regulations enacted in the future or that existing
regulations will not restrict the ability of the Company to continue its
current methods of operations or to expand its operations.
Federal Regulation
Pursuant to regulations promulgated under the Bank Secrecy Act by the U.S.
Treasury Department, transactions involving currency in an amount greater than
$10,000 or the purchase of monetary instruments for cash in amounts from
$3,000 to $10,000 must be recorded. In general, every financial institution,
including the Company, must report each deposit, withdrawal, exchange of
currency or other payment or transfer, whether by, through or to the financial
institution that involves currency in an amount greater than $10,000. In
addition, multiple currency transactions must be treated as single
transactions if the financial institution has knowledge that the transactions
are by, or on behalf of, any one person and result in either cash-in or cash-
out totaling more than $10,000 during any one business day. Management
believes that the Company's POS system and employee training programs are
essential to the Company's compliance with these regulatory requirements.
From time to time, legislation is introduced at the state or federal level
which could have a broad impact on the Company's business. During 1995, a bill
was introduced in the U.S. House of Representatives which would, in part,
require states to license check cashers. In the opinion of management, the
passage of this bill in its current form would not materially impact the
Company's operations.
In 1994, Congress passed a bill which suggests, but does not require, that
check cashers disclose their fees to both customers and state regulators and
suggests that the states establish uniform laws for licensing and regulating
check cashers. In addition, the bill requires check cashers to register with
the U.S. Treasury Department. Specific regulations governing these
registration requirements have not yet been issued. The provisions of the bill
have not materially impacted the Company's operations.
PROPRIETARY RIGHTS
The Company has the rights to a variety of service marks relating to
products or services it provides in its stores. In addition, the Company has
trademarks relating to the various names under which the Company's stores
operate. The Company does not believe that any of its service marks or
trademarks are material to its business.
INSURANCE COVERAGE
The Company is required to maintain insurance coverage against loss,
including theft, pursuant to its contracts with several state agencies. In
addition, the Company maintains insurance coverage against criminal acts,
which coverage has a $25,000 deductible.
51
<PAGE>
EMPLOYEES
As of September 30, 1996, the Company employed approximately 1,200 persons,
comprised of: (i) 50 persons employed at the Company's headquarters in
accounting, MIS, legal and administrative functions, (ii) 1,110 persons
employed by the Retail Stores Division, including tellers, store managers,
regional supervisors, operations directors and administrative personnel and
(iii) 40 persons employed by the Merchant Services Division who oversee
operations, coordinate the activities of field personnel and manage the
benefits distribution systems in New York State and Pennsylvania.
None of the Company's employees is represented by labor unions, and
management believes that its relations with its employees are good.
LEGAL PROCEEDINGS
In May 1996, a complaint was filed against the Company and one of its
subsidiaries relating to the acquisition in February 1995 of the assets of 19
check cashing stores from ARI, Inc. for consideration consisting, in part, of
a $2.7 million note issued by such subsidiary (which note is not guaranteed by
the Company). The seller has sued for breach of contract, breach of oral
guaranty, fraudulent inducement, negligent misrepresentation and fraudulent
misrepresentation, for which he contends he is entitled to in excess of $2.7
million, plus punitive damages and attorney's fees. The Company intends to
actively contest each of the causes of action asserted in the complaint.
The Company is not a party to any other material litigation and is not aware
of any pending or threatened litigation, other than routine litigation and
administrative proceedings arising in the ordinary course of business, that
would have a material adverse effect on the Company.
52
<PAGE>
MANAGEMENT
DIRECTORS AND OFFICERS
The directors and officers of Holdings as of the date of this Prospectus and
their respective ages and positions with Holdings are set forth below:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Jeffrey Weiss................ 52 Chairman of the Board of Directors, President
and Chief Executive Officer
Donald Gayhardt.............. 32 Executive Vice President, Chief Financial
Officer, Secretary, Treasurer and Director
Nora Kerppola................ 31 Director
Wesley Lang, Jr.............. 39 Director
Paul Gelburd................. 39 Director
Joshua Brain................. 41 Director
</TABLE>
The directors and officers of DFG as of the date of this Prospectus and
their respective ages and positions with DFG are set forth below:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Jeffrey Weiss................... 52 Chairman of the Board of Directors,
President and Chief Executive Officer
Donald Gayhardt................. 32 Executive Vice President, Chief Financial
Officer, Secretary, Treasurer and Director
Peter Sokolowski................ 35 Vice President--Finance
Bernard Flaherty................ 46 Vice President--Store Operations
Michael Marcus.................. 35 Vice President--Information Systems
</TABLE>
Jeffrey Weiss has served as the Chairman, President and Chief Executive
Officer of DFG and Holdings since the Company's acquisition by an affiliate of
Bear Stearns in May 1990. Until June 1992, Mr. Weiss was also a Managing
Director at Bear Stearns & Co. Inc. ("Bear Stearns") with primary
responsibility for the firm's investments in small to mid-sized companies, in
addition to serving as Chairman and Chief Executive Officer for several of
these companies. Mr. Weiss is the author of several popular financial guides.
Donald Gayhardt joined DFG as a full-time employee in October 1992 and
currently has responsibility for business development, finance, treasury and
general administrative functions. Mr. Gayhardt has also served on the Board of
Directors of Holdings since 1990, and on the Board of Directors of DFG since
1993. Prior to joining the company, Mr. Gayhardt was employed by Bear Stearns
from 1988 to 1993, most recently as an Associate Director in the Principal
Activities Group, where he had oversight responsibility for the financial and
accounting functions at a number of manufacturing, distribution and retailing
firms, including DFG. Prior to joining Bear Stearns, Mr. Gayhardt held
positions in the mergers and acquisitions advisory and accounting fields.
Peter Sokolowski has been Vice President--Finance of DFG since June 1991 and
has overall responsibility for the Company's accounting systems and controls,
as well as financial management. Prior to joining the Company, Mr. Sokolowski
worked in various financial positions in the commercial banking industry.
Bernard Flaherty joined DFG in May 1995 as Vice President--Store Operations.
Mr. Flaherty's 22 years of multi-unit retail experience includes both
operations and marketing responsibilities. Prior to joining the Company, Mr.
Flaherty served as Vice President of Sales/Marketing for Coastal Mart, Inc.
for two years. Prior to that, Mr. Flaherty had an extensive 20-year career
with The Southland Corporation.
53
<PAGE>
Michael Marcus has been Vice President--Information Systems of DFG since
1992. Mr. Marcus is responsible for the data processing and information
technology functions and has developed an enterprise-wide store management
system which includes financial reporting and inventory control. Prior to
joining DFG, Mr. Marcus was employed in artificial intelligence programming
with E.I. du Pont de Nemours and Company.
Nora Kerppola has been a director of Holdings since January 1995. She is a
General Partner of WPG Private Equity Partners, L.P., the general partner of
WPG Corporate Development Associates IV, L.P., a shareholder of Holdings.
Prior to joining WPG in 1994, she worked as a private equity investor for four
years with Investor International (U.S.), a subsidiary of Sweden's Wallenberg
Group. Ms. Kerppola began her career at CS First Boston Corporation, where she
was an Associate in the Investment Banking Department.
Wesley Lang, Jr. has been a director of Holdings since June 1994. He has
been a principal of WPG since 1987, and was elected to that firm's Executive
Committee in 1994. Mr. Lang is currently a Managing General Partner of WPG
Private Equity Partners, L.P., the general partner of WPG Corporate
Development Associates IV, L.P. Prior to joining WPG in 1985, he specialized
in acquisition financing at Manufacturers Hanover Trust Company. He also
serves as a director of Durakon Industries, Inc. and Chyron Corporation.
Paul Gelburd is a Senior Vice President in the Equity Capital Group of GECC
specializing in strategic investments. Mr. Gelburd has been a director of
Holdings since August 1996. He joined GECC in 1995 from Columbia Financial
Partners, a private equity investment firm, where he was a partner since 1992.
Prior to Columbia Financial Partners, Mr. Gelburd was a partner at Putnam,
Lovell & Co., a boutique investment advisory firm specializing in the money
management industry. From 1984 to 1990, Mr. Gelburd was a member of the
Mergers and Acquisitions group at Morgan Stanley, where he specialized in
financial institutions. Prior to Morgan Stanley, Mr. Gelburd was a member of
the energy and technology practice at Booz, Allen & Hamilton.
Joshua Brain has been a director of Holdings since September 1996, the month
in which he joined Pegasus Financial LLC as a principal. Prior to joining
Pegasus Financial LLC, Mr. Brain was a Managing Director and a member of the
management committee at Financial Security Assurance Inc., a New York monoline
financial guaranty company which he joined in 1989. From 1983 to 1989, Mr.
Brain practiced law with Cleary, Gottlieb, Steen & Hamilton in New York.
COMPENSATION OF DIRECTORS
Directors are not provided with any compensation for their services other
than the reimbursement of expenses associated with attending meetings of the
Boards of Directors or any committee thereof.
COMMITTEES
There are currently no committees of the Boards of Directors.
54
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information with respect to the compensation
of the Chief Executive Officer and each of the other executive officers of the
Company who had annual compensation in fiscal year 1996 in excess of $100,000
(the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------ -------------
OTHER ANNUAL SECURITIES
NAME AND PRINCIPAL COMPEN- UNDERLYING ALL OTHER
POSITION YEAR SALARY BONUS SATION(1) OPTIONS(#)(3) COMPENSATION
------------------ ---- -------- -------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Jeffrey Weiss........... 1996 $350,000 $231,272 $4,750
Chairman, President and 1995 350,000 189,000 $67,364 6,246
Chief Executive Officer 1994 261,384 242,500 3,750 4,620
Donald Gayhardt......... 1996 140,000 67,760 4,135
Executive Vice 1995 140,000 75,600 6,008
President and Chief 1994 130,000 59,500 1,250 5,064
Financial Officer
Bernard Flaherty(2)..... 1996 105,000 10,000 1,987
Vice President--Store 1995 13,125 0 214
Operations
</TABLE>
- --------
(1) Includes $18,582 paid for Mr. Weiss in 1995 for a Company leased vehicle
and $26,453 paid for life insurance premiums on policies where the Company
was not the named beneficiary. Perquisites and other personal benefits
provided to each other Named Executive Officer did not exceed the lesser
of $50,000 or 10% of the total salary and bonus for such Named Executive
Officer.
(2) Mr. Flaherty joined the Company in May 1995.
(3) The amounts shown in this column represent stock options with respect to
shares of Holdings Common Stock which were issued in each fiscal year. No
options to purchase Holdings Common Stock or SARs were granted in fiscal
1996 or 1995 to the Named Executive Officers.
The following table sets forth information concerning options to purchase
Holdings Common Stock held by each of the Named Executive Officers as of the
fiscal year ended June 30, 1996.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES(1)
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
OPTIONS AT FISCAL YEAR END FISCAL YEAR END(2)
NAME -------------------------- -------------------------
- ---- EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
<S> <C> <C>
Jeffrey Weiss.............. 1,750/2,000 $1,050,000/$525,000
Donald Gayhardt............ 583/667 349,800/175,200
</TABLE>
- --------
(1) No options were exercised and no SARs were granted in the last fiscal
year.
(2) An assumed fair market value of $1,600 per share was used to calculate the
value of the options. As the shares are not traded in an established
public market, the value assigned is based on the price received in the
Equity Transaction.
55
<PAGE>
EMPLOYMENT AGREEMENTS
Jeffrey Weiss
Mr. Weiss, Chairman, President and Chief Executive Officer of Holdings and
DFG, is employed pursuant to an Employment Agreement (the "Weiss Agreement")
dated as of August 8, 1996, between Mr. Weiss, DFG and Holdings (DFG and
Holdings being collectively referred to herein as the "Employer"). The Weiss
Agreement provides for an annual base salary of $400,000, to be adjusted
upward annually at the discretion of the Board of Directors of Holdings. In
addition, Mr. Weiss is eligible to receive an annual bonus in an amount equal
to 60% of his base salary, contingent upon the Employer achieving 100% of its
targeted results (with certain adjustments to the extent the Employer achieves
results short of or in excess of its targeted results). Under certain
circumstances, Mr. Weiss is entitled to the payment of a severance benefit
equal to the sum of two years' base salary and the cash bonus received for the
most recently completed two fiscal years.
The Weiss Agreement also provides for a three year term, terminating on the
later of August 8, 1999 and the first anniversary of the date on which the
Employer gives Mr. Weiss written notice of termination, unless the Weiss
Agreement is otherwise terminated pursuant to its terms. Pursuant to the Weiss
Agreement, Mr. Weiss was granted non-qualified options to acquire up to 2,625
shares of Holdings Common Stock. See "Principal Shareholders." Mr. Weiss is
eligible to participate in all fringe benefit programs of the Employer offered
from time to time to its senior management employees.
Pursuant to the Weiss Agreement, Mr. Weiss has agreed that effective upon
termination, and in consideration for the payment of a severance benefit, he
will not compete with the Employer within the United States for a period of
two years.
Donald Gayhardt
Mr. Gayhardt, Executive Vice President and Chief Financial Officer of
Holdings and DFG, is employed pursuant to an Employment Agreement (the
"Gayhardt Agreement") dated as of August 8, 1996, between Mr. Gayhardt and the
Employer. The Gayhardt Agreement provides for an annual base salary of
$160,000, to be adjusted upward annually at the discretion of the Board of
Directors of Holdings. In addition, Mr. Gayhardt is eligible to receive an
annual bonus in an amount equal to 60% of his base salary, contingent upon the
Employer achieving 100% of its targeted results (with certain adjustments to
the extent the Employer achieves results short of or in excess of its targeted
results). Under certain circumstances, Mr. Gayhardt is entitled to the payment
of a severance benefit equal to the sum of one year's base salary and the cash
bonus received for the most recently completed calendar year.
The Gayhardt Agreement also provides for a three year term, terminating on
the later of August 8, 1999 and the first anniversary of the date on which the
Employer gives Mr. Gayhardt written notice of termination, unless the Gayhardt
Agreement is otherwise terminated pursuant to its terms. Pursuant to the
Gayhardt Agreement, Mr. Gayhardt was granted non-qualified options to acquire
up to 875 shares of Holdings Common Stock. See "Principal Shareholders." Mr.
Gayhardt is eligible to participate in all fringe benefit programs of the
Employer offered from time to time to its senior management employees.
Pursuant to the Gayhardt Agreement, Mr. Gayhardt has agreed that effective
upon termination, and in consideration for the payment of a severance benefit,
he will not compete with the Employer within the United States for a period of
one year.
56
<PAGE>
PRINCIPAL SHAREHOLDERS
All of the issued and outstanding shares of capital stock of the Company are
owned by Holdings.
The following table sets forth as of September 30, 1996 the number of shares
of Holdings Common Stock owned beneficially by (a) each person that is the
beneficial owner of more than 5% of Holdings Common Stock, (b) all directors
and nominees, (c) the Named Executive Officers and (d) all directors and
executive officers as a group. The address of each officer and director is c/o
the Company unless otherwise indicated. As of such date, there were a total of
30,055.04 shares of Holdings Common Stock outstanding.
<TABLE>
<CAPTION>
BENEFICIAL OWNER NUMBER PERCENT
---------------- --------- -------
<S> <C> <C>
WPG Corporate Development Associates IV, L.P. and
WPG Corporate Development Associates IV (Overseas), L.P. ... 17,877.74 59.49%
One New York Plaza
New York, New York 10004
PAG Dollar Investors LLC and Pegasus Partners, L.P........... 6,250.00 20.80%
591 West Putnam Avenue
Greenwich, Connecticut 06831
General Electric Capital Corporation......................... 4,375.00 14.56%
260 Long Ridge Road
Stamford, Connecticut 06927
Jeffrey Weiss(1)............................................. 2,306.23 7.13%
Donald Gayhardt(2)........................................... 768.75 2.49%
Wesley W. Lang, Jr.(3)....................................... 24.73 0.08%
c/o Weiss, Peck & Greer
One New York Plaza
New York, New York 10004
Nora Kerppola (4)............................................ 14.84 0.05%
c/o Weiss, Peck & Greer
One New York Plaza
New York, New York 10004
All directors and officers as a group (9 persons)(5)......... 3,114.55 9.45%
</TABLE>
- --------
(1) Includes options to purchase an aggregate of 2,187.50 shares of Holdings
Common Stock which are currently exercisable or which can be exercised
within 60 days. Jeffrey Weiss holds options to purchase an aggregate of
5,325 shares of Holdings Common Stock, consisting of: (i) options to
purchase 2,625 shares of Holdings Common Stock at a price of $1,000 per
share (such options vest in equal monthly increments over three years,
commencing in July 1994 (and all become immediately vested upon the
occurrence of certain circumstances), and have a term of ten years from
June 30, 1994); (ii) options to purchase 1,125 shares of Holdings Common
Stock with an initial exercise price of $1,000 per share on June 30, 1994,
with the exercise price increasing by 40% on each of June 30, 1995, 1996,
1997, 1998 and 1999, in each case over the exercise price of the prior
year, with an exercise price of $5,000 per share from and after June 30,
1999 (such options are fully vested but are exercisable only in the event
of a change of control of Holdings or an initial public offering of
Holdings Common Stock); and (iii) options to purchase 1,575 shares of
Holdings Common Stock at an exercise price of $1,600 per share (such
options are exercisable only in the event that, at the time of exercise,
WPG has realized an internal rate of return of 35% or more on its equity
investment in Holdings made in August 1996).
(2) Includes options to purchase an aggregate of 729.17 shares of Holdings
Common Stock which are currently exercisable or which can be exercised
within 60 days. Donald Gayhardt holds options to purchase an aggregate of
1,775 shares of Holdings Common Stock, consisting of: (i) options to
purchase 875 shares of Holdings Common Stock at a price of $1,000 per
share (such options vest in equal monthly increments over three years,
commencing in July 1994 (and all become immediately vested upon the
occurrence of certain circumstances), and have a term of ten years from
June 30, 1994); (ii) options to purchase 375 shares of Holdings Common
Stock with an initial exercise price of $1,000 per share on June 30, 1994,
with the exercise price increasing by 40% on each of June 30, 1995, 1996,
1997, 1998 and 1999, in each case over the exercise price of the prior
year, with an exercise price of $5,000 per share from and after June 30,
1999 (such options are fully vested but are exercisable only in the event
of a change of control of Holdings or an initial public offering of
Holdings Common Stock); and (iii) options to purchase 525 shares of
Holdings Common Stock at an exercise price of $1,600 per share (such
options are exercisable only in the event that, at the time of exercise,
WPG has realized an internal rate of return of 35% or more on its equity
investment in Holdings made in August 1996).
(3) Mr. Lang, Jr. serves as a Managing General Partner of the general partner
of WPG Corporate Development Associates IV, L.P. and as a Managing General
Partner and director of the domestic and overseas General Partners,
respectively, of WPG Corporate Development Associates IV (Overseas), L.P.
Mr. Lang, Jr. disclaims beneficial ownership of Holdings Common Stock
owned by those entities.
(4) Ms. Kerppola serves as a general partner of the general partner of WPG
Corporate Development Associates IV, L.P. and of the domestic general
partner of WPG Corporate Development Associates IV (Overseas), L.P. Ms.
Kerppola disclaims beneficial ownership of Holdings Common Stock owned by
those entities.
(5) Includes 2,916.67 shares subject to currently exercisable options or
options exercisable within 60 days.
57
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
SHAREHOLDERS AGREEMENT
Holdings has entered into an Amended and Restated Shareholders Agreement
dated August 8, 1996 with certain shareholders signatory thereto (the
"Shareholders Agreement"). The Shareholders Agreement provides, among other
things, for certain restrictions on the disposition of Holdings Common Stock.
In addition, the Shareholders Agreement provides for the repurchase of the
securities held by certain shareholders under certain circumstances and
subject to certain restrictions.
The Shareholders Agreement also provides for demand and incidental (or
"piggyback") registration rights and certain other co-sale and preemptive
rights.
In addition to its other rights and obligations as a party to the
Shareholders Agreement, GECC has the right to offer to purchase certain equity
securities of Holdings in the event Holdings raises capital through the
issuance of equity securities not involving a public offering. This offer is
subject to certain limitations and may be rejected by Holdings. Furthermore,
GECC has certain preemptive rights with respect to certain transactions
involving a change in control of Holdings or the sale of all or substantially
all of Holdings' and its subsidiaries' assets.
In the event that certain shareholders desire to transfer all or
substantially all of their Holdings Common Stock in a single or series of
related transactions, such shareholders have the right to require all of the
parties to the Shareholders Agreement, except Holdings, to transfer to the
purchaser an equal proportion of their shares at the same price and on the
same terms and conditions.
Certain shareholders have granted to WPG Corporate Development Associates
IV, L.P. ("CDA IV Domestic") their proxy to vote all of their shares, which
proxy is irrevocable and binding on all transferees. In addition, the
shareholders have agreed to vote their shares so that (1) the number of
members of the Board of Directors remains at six, (2) the shareholders elect
(a) two nominees selected by CDA IV Domestic and WPG Corporate Development
Associates IV (Overseas), L.P. ("CDA IV Overseas," and together with CDA IV,
the "CDA Funds"), (b) one nominee designated by Pegasus, (c) one nominee
designated by GECC and (d) two nominees designated by Messrs. Weiss and
Gayhardt, (3) the nominating shareholders have the right to remove their
nominees from the Board of Directors for or without cause and replace them
upon such removal and (4) the nominating shareholders have the right to
designate replacement directors to fill any vacancies created by their
nominees ceasing to serve as directors during such directors' terms of office.
The Shareholders Agreement also provides for certain supermajority
requirements. These provisions require the approval by certain shareholders'
nominees of certain actions contemplated by Holdings or any of its
subsidiaries. In addition, if after August 8, 1999 any of the directors
selected by the CDA Funds, GECC, Pegasus, or PAG Dollar Investors LLC
("Pegasus II") (CDA Funds, GECC, Pegasus and Pegasus II being hereinafter
referred to collectively as the "Investors") desire that Holdings make an
initial public offering of its securities, and if the other Investors are
unwilling to approve such offering, the Investors will take such actions as
are reasonably necessary to effect a sale of Holdings and its subsidiaries as
a going concern.
LOAN TO AN OFFICER/DIRECTOR
Jeffrey Weiss received a loan on June 30, 1994 from the Company in the
amount of $200,000. Interest accrues on the unpaid principal balance at a
fixed rate of 9.25%. The loan is payable on the first to occur of (i) June 30,
1997, (ii) 90 days following his voluntary resignation or the termination of
his employment for cause, and (iii) one year following the termination of his
employment relationship with the Company for any other reason.
58
<PAGE>
THE EXCHANGE OFFER
PURPOSE AND EFFECT
The Old Notes were issued under an Indenture, dated as of November 15, 1996,
which requires that the Company file a registration statement under the
Securities Act with respect to the New Notes and, upon the effectiveness of
such registration statement, offer to the holders of the Old Notes the
opportunity to exchange their Old Notes for a like principal amount of New
Notes, which will be issued without a restrictive legend and, except as set
forth below, may be reoffered and resold by the holder without registration
under the Securities Act. Upon the completion of the Exchange Offer, the
Company's obligations with respect to the registration of the Old Notes and
the New Notes will terminate, except as provided below. A copy of the
Indenture and the Registration Rights Agreement delivered in connection
therewith have been filed as exhibits to the Registration Statement of which
this Prospectus is a part. As a result of the filing and the effectiveness of
the Registration Statement, certain prospective increases in the interest rate
on the Old Notes provided for in the Registration Rights Agreement will not
occur. Following the completion of the Exchange Offer, holders of Old Notes
not tendered will not have any further registration rights, except as provided
below, and the Old Notes will continue to be subject to certain restrictions
on transfer. Accordingly, the liquidity of the market for the Old Notes could
be adversely affected upon completion of the Exchange Offer.
Based on an interpretation by the staff of the Commission set forth in no-
action letters issued to third-parties, the Company believes that New Notes
issued pursuant to the Exchange Offer in exchange for Old Notes may be offered
for resale, resold and otherwise transferred by a holder thereof (other than
any such holder that is an "affiliate" of the Company within the meaning of
Rule 405 under the Securities Act) without compliance with the registration
and prospectus delivery provisions of the Securities Act, provided that such
holder represents to the Company that (i) such New Notes are acquired in the
ordinary course of business of such holder, (ii) such holder is not engaging
in and does not intend to engage in a distribution of such New Notes and (iii)
such holder has no arrangement or understanding with any person to participate
in the distribution of such New Notes. Any holder who tenders in the Exchange
Offer for the purpose of participating in a distribution of the New Notes
cannot rely on such interpretation by the staff of the Commission and must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with a secondary resale transaction. Each broker-
dealer that receives New Notes for its own account in exchange for Old Notes,
where such Old Notes were acquired by such broker-dealer as a result of
market-making activities or other trading activities, must acknowledge that it
will deliver a prospectus meeting the requirements of the Securities Act in
connection with any resales of such New Notes. See "Plan of Distribution."
In the event that any holder of Old Notes would not receive freely tradeable
New Notes in the Exchange Offer or is not eligible to participate in the
Exchange Offer, such holder can elect, by so indicating on the Letter of
Transmittal and providing certain additional necessary information, to have
such holder's Old Notes registered in a "shelf" registration statement on an
appropriate form pursuant to Rule 415 under the Securities Act.
In the event that the Company is obligated to file a "shelf" registration
statement, it will be required to keep such "shelf" registration statement
effective for a period of three years or such shorter period that will
terminate when all of the Old Notes covered by such registration statement
have been sold pursuant thereto. Other than as set forth in this paragraph, no
holder will have the right to require the Company to register such holder's
Notes under the Securities Act. See "Procedures for Tendering Old Notes."
TERMS OF THE EXCHANGE OFFER; PERIOD FOR TENDERING OLD NOTES
Upon the terms and subject to the conditions set forth in this Prospectus
and in the accompanying Letter of Transmittal (which together constitute the
Exchange Offer), the Company will accept for exchange Old Notes which are
properly tendered on or prior to the Expiration Date and not withdrawn as
permitted below. As used herein, the term "Expiration Date" means 5:00 P.M.,
New York City time, on , 1997; provided, however, that if the Company, in
its sole discretion, has extended the period of time during which the Exchange
Offer is open, the term "Expiration Date" means the latest time and date to
which the Exchange Offer is extended.
59
<PAGE>
As of the date of this Prospectus, $110,000,000 aggregate principal amount
of the Old Notes is outstanding. This Prospectus, together with the Letter of
Transmittal, is first being sent on or about , 1997, to all Holders of Old
Notes known to the Company. The Company's obligation to accept Old Notes for
exchange pursuant to the Exchange Offer is subject to certain customary
conditions as set forth under "--Certain Conditions to the Exchange Offer"
below.
The Company expressly reserves the right, at any time or from time to time,
to extend the period of time during which the Exchange Offer is open, and
thereby delay acceptance for exchange of any Old Notes, by giving oral or
written notice of such extension to the Holders thereof as described below.
During any such extension, all Old Notes previously tendered will remain
subject to the Exchange Offer and may be accepted for exchange by the Company.
Any Old Notes not accepted for exchange for any reason will be returned
without expense to the tendering Holder thereof as promptly as practicable
after the expiration or termination of the Exchange Offer.
Old Notes tendered in the Exchange Offer must be in denominations of
principal amount of $ 1,000 or any integral multiple thereof.
The Company expressly reserves the right to amend or terminate the Exchange
Offer, and not to accept for exchange any Old Notes not theretofore accepted
for exchange, upon the occurrence of any of the conditions of the Exchange
Offer specified below under "--Certain Conditions to the Exchange Offer." The
Company will give oral or written notice of any extension, amendment, non-
acceptance or termination to the Holders of the Old Notes as promptly as
practicable, such notice in the case of any extension to be issued by means of
a press release or other public announcement no later than 9:00 a.m., New York
City time, on the next business day after the previously scheduled Expiration
Date.
PROCEDURES FOR TENDERING OLD NOTES
Only a registered holder of Old Notes may tender such Old Notes in the
Exchange Offer. The tender to the Company of Old Notes by a Holder thereof as
set forth below and the acceptance thereof by the Company will constitute a
binding agreement between the tendering Holder and the Company upon the terms
and subject to the conditions set forth in this Prospectus and in the
accompanying Letter of Transmittal. Except as set forth below, a Holder who
wishes to tender Old Notes for exchange pursuant to the Exchange Offer must
transmit a properly completed and duly executed Letter of Transmittal,
including all other documents required by such Letter of Transmittal, to Fleet
National Bank (the "Exchange Agent") at one of the addresses set forth below
under "Exchange Agent" on or prior to the Expiration Date. In addition, either
(i) certificates for such Old Notes must be received by the Exchange Agent
along with the Letter of Transmittal, (ii) a timely confirmation of a book-
entry transfer (a "Book-Entry Confirmation") of such Old Notes, if such
procedure is available, into the Exchange Agent's account at The Depository
Trust Company (the "Book-Entry Transfer Facility") pursuant to the procedure
for book-entry transfer described below, must be received by the Exchange
Agent prior to the Expiration Date, or (iii) the Holder must comply with the
guaranteed delivery procedures described below. THE METHOD OF DELIVERY OF OLD
NOTES, LETTERS OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE
ELECTION AND RISK OF THE HOLDERS. IF SUCH DELIVERY IS BY MAIL, IT IS
RECOMMENDED THAT HOLDERS USE AN OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL
CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY. NO LETTERS
OF TRANSMITTAL OR OLD NOTES SHOULD BE SENT TO THE COMPANY. HOLDERS MAY REQUEST
THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES, OR
NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH HOLDERS.
Any beneficial owner whose Old Notes are registered in the name of a broker,
dealer, commercial bank, trust company, or other nominee and who wishes to
tender should contact the registered holder promptly and instruct such
registered holder to tender on such beneficial owner's behalf. If such
beneficial owner wishes to tender on such owner's behalf, such owner must,
prior to completing and executing the Letter of Transmittal and delivering
such owner's Old Notes, either make appropriate arrangements to register
ownership of the Old Notes in such beneficial owner's name or obtain a
properly completed bond power from the registered holder. The transfer of
registered ownership may take considerable time.
60
<PAGE>
Signatures on a Letter of Transmittal or a notice of withdrawal described
below (see "--Withdrawal Rights"), as the case may be, must be guaranteed (see
"--Guaranteed Delivery Procedures") unless the Old Notes surrendered for
exchange pursuant thereto are tendered (i) by a registered Holder of the Old
Notes who has not completed the box entitled "Special Issuance Instructions"
or "Special Delivery Instructions" on the Letter of Transmittal or (ii) for
the account of an Eligible Institution (as defined below). In the event that
signatures on a Letter of Transmittal or a notice of withdrawal, as the case
may be, are required to be guaranteed, such guaranties must be by a financial
institution (including most banks, savings and loan associations and brokerage
houses) that is a participant in the Securities Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Program or the Stock Exchanges
Medallion Program (collectively, "Eligible Institutions"). If Old Notes are
registered in the name of a person other than a signer of the Letter of
Transmittal, the Old Notes surrendered for exchange must be endorsed by or be
accompanied by a written instrument or instruments of transfer or exchange, in
satisfactory form as determined by the Company in its sole discretion, duly
executed by the registered holder exactly as the name or names of the
registered holder or holders appear on the Old Notes with the signature
thereon guarantied by an Eligible Institution.
If the Letter of Transmittal or any Old Notes or powers of attorney are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such person should so indicate when signing, and, unless waived by
the Company, proper evidence satisfactory to the Company of their authority to
so act must be submitted with the Letter of Transmittal.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of Old Notes tendered for exchange will be determined
by the Company in its sole discretion, which determination shall be final and
binding. The Company reserves the absolute right to reject any and all tenders
of any particular Old Notes not properly tendered or not to accept any
particular Old Note which acceptance might, in the judgment of the Company or
its counsel, be unlawful. The Company also reserves the absolute right to
waive any defects or irregularities or conditions of the Exchange Offer as to
any particular Old Notes either before or after the Expiration Date (including
the right to waive the ineligibility of any Holder who seeks to tender Old
Notes in the Exchange Offer). The interpretation of the terms and conditions
of the Exchange Offer as to any particular Old Notes either before or after
the Expiration Date (including the Letter of Transmittal and the instructions
thereto) by the Company shall be final and binding on all parties. Unless
waived, any defects or irregularities in connection with tenders of Old Notes
for exchange must be cured within such reasonable period of time as the
Company shall determine. None of the Company, the Exchange Agent or any other
person shall be under any duty to give notification of any defect or
irregularity with respect to any tender of Old Notes for exchange, nor shall
any of them incur any liability for failure to give such notification.
By tendering, each Holder will represent to the Company that, among other
things, the New Notes acquired pursuant to the Exchange Offer are being
obtained in the ordinary course of business of the person receiving such New
Notes, whether or not such person is the Holder, and that neither the Holder
nor such other person has any arrangement or understanding with any person to
participate in the distribution of the New Notes. If any Holder or any such
other person is an "affiliate," as defined under Rule 405 of the Securities
Act, of the Company or is engaged in or intends to engage in, or has an
arrangement or understanding with any person to participate in, a distribution
of such New Notes to be acquired pursuant to the Exchange Offer, such Holder
or any such other person (i) may not rely on the applicable interpretation of
the staff of the SEC and (ii) must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any resale
transaction. Each broker-dealer that receives New Notes for its own account in
exchange for Old Notes, where such Old Notes were acquired by such broker-
dealer as a result of market-making activities or other trading activities,
must acknowledge that it will deliver a prospectus in connection with any
resale of such New Notes. See "Plan of Distribution." The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act.
ACCEPTANCE OF OLD NOTES FOR EXCHANGE; DELIVERY OF NEW NOTES
Upon satisfaction or waiver of all of the conditions to the Exchange Offer,
the Company will accept, promptly after the Expiration Date, all Old Notes
properly tendered and will issue the New Notes promptly after
61
<PAGE>
acceptance of the Old Notes. See "--Certain Conditions to the Exchange Offer"
below. For purposes of the Exchange Offer, the Company will be deemed to have
accepted properly tendered Old Notes for exchange when, as and if the Company
has given oral or written notice thereof to the Exchange Agent.
For each Old Note accepted for exchange, the Holder of such Old Note will
receive as set forth below under "Description of the Notes--Book-Entry,
Delivery and Form" a New Note having a principal amount equal to that of the
surrendered Old Note. Accordingly, registered holders of New Notes on the
relevant record date for the first interest payment date following the
consummation of the Exchange Offer will receive interest accruing from the
most recent date to which interest has been paid on the Old Notes or, if no
interest has been paid, from November 15, 1996. Old Notes accepted for
exchange will cease to accrue interest from and after the date of consummation
of the Exchange Offer. Holders whose Old Notes are accepted for exchange will
not receive any payment in respect of accrued interest on such Old Notes
otherwise payable on any interest payment date the record date for which
occurs on or after consummation of the Exchange Offer.
In all cases, issuance of New Notes for Old Notes that are accepted for
exchange pursuant to the Exchange Offer will be made only after timely receipt
by the Exchange Agent of certificates for such Old Notes or a timely Book-
Entry Confirmation of such Old Notes into the Exchange Agent's account at the
Book-Entry Transfer Facility, a properly completed and duly executed Letter of
Transmittal and all other required documents. If any tendered Old Notes are
not accepted for any reason set forth in the terms and conditions of the
Exchange Offer or if Old Notes are submitted for a greater principal amount
than the Holder desires to exchange, such unaccepted or non-exchanged Old
Notes will be returned without expense to the tendering Holder thereof (or, in
the case of Old Notes tendered by book-entry transfer into the Exchange
Agent's account at the Book-Entry Transfer Facility pursuant to the book-entry
procedures described below, such non-exchanged Old Notes will be credited to
an account maintained with such Book-Entry Transfer Facility) as promptly as
practicable after the expiration or termination of the Exchange Offer.
BOOK-ENTRY TRANSFER
The Exchange Agent will make a request to establish an account with respect
to the Old Notes at the Book-Entry Transfer Facility for purposes of the
Exchange Offer within two business days after the date of this Prospectus, and
any financial institution that is a participant in the Book-Entry Transfer
Facility's systems may make book-entry delivery of Old Notes by causing the
Book-Entry Transfer Facility to transfer such Old Notes into the Exchange
Agent's account at the Book-Entry Transfer Facility in accordance with such
Book-Entry Transfer Facility's procedures for transfer. However, although
delivery of Old Notes may be effected through book-entry transfer at the Book-
Entry Transfer Facility, the Letter of Transmittal or a facsimile thereof,
with any required signature guarantees and any other required documents, must,
in any case, be transmitted to and received by the Exchange Agent at one of
the addresses set forth below under "--Exchange Agent" on or prior to the
Expiration Date or the guaranteed delivery procedures described below must be
complied with.
GUARANTEED DELIVERY PROCEDURES
If a registered holder of the Old Notes desires to tender such Old Notes and
the Old Notes are not immediately available, or time will not permit such
Holder's Old Notes or other required documents to reach the Exchange Agent
before the Expiration Date, or the procedure for book-entry transfer cannot be
completed on a timely basis, a tender may be effected if (i) the tender is
made through an Eligible Institution, (ii) on or prior to 5:00 P.M., New York
City time, on the Expiration Date, the Exchange Agent receives from such
Eligible Institution a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof) and Notice of Guaranteed Delivery,
substantially in the form provided by the Company (by telegram, telex,
facsimile transmission, mail or hand delivery), setting forth the name and
address of the Holder of Old Notes and the amount of Old Notes tendered,
stating that the tender is being made thereby and guaranteeing that within
three New York Stock Exchange ("NYSE") trading days after the date of
execution of the Notice of Guaranteed Delivery, the certificates for all
physically tendered Old Notes, in proper form for transfer, or a Book-Entry
Confirmation, as the case may be, and any other documents required by the
Letter of Transmittal will be deposited by the Eligible Institution with the
Exchange Agent, and (iii) the certificates for all physically tendered
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<PAGE>
Old Notes, in proper form for transfer, or a Book-Entry Confirmation, as the
case may be, and any other documents required by the Letter of Transmittal
will be deposited by the Eligible Institution within three NYSE trading days
after the date of execution of the Notice of Guaranteed Delivery.
WITHDRAWAL RIGHTS
Tenders of Old Notes may be withdrawn at any time prior to 5:00 P.M., New
York City time, on the Expiration Date. For a withdrawal to be effective, a
written notice of withdrawal must be received by the Exchange Agent at one of
the addresses set forth below under "--Exchange Agent." Any such notice of
withdrawal must specify the name of the person having tendered the Old Notes
to be withdrawn, identify the Old Notes to be withdrawn (including the
principal amount of such Old Notes), and (where certificates for Old Notes
have been transmitted) specify the name in which such Old Notes are
registered, if different from that of the withdrawing Holder. If certificates
for Old Notes have been delivered or otherwise identified to the Exchange
Agent, then, prior to the release of such certificates the withdrawing Holder
must also submit the serial numbers of the particular certificates to be
withdrawn and a signed notice of withdrawal with signatures guaranteed by an
Eligible Institution unless such Holder is an Eligible Institution in which
case such guarantee will not be required. If Old Notes have been tendered
pursuant to the procedure for book-entry transfer described above, any notice
of withdrawal must specify the name and number of the account at the Book-
Entry Transfer Facility to be credited with the withdrawn Old Notes and
otherwise comply with the procedures of such facility. All questions as to the
validity, form and eligibility (including time of receipt) of such notices
will be determined by the Company, whose determination will be final and
binding on all parties. Any Old Notes so withdrawn will be deemed not to have
been validly tendered for exchange for purposes of the Exchange Offer. Any Old
Notes which have been tendered for exchange but which are not exchanged for
any reason will be returned to the Holder thereof without cost to such Holder
(or, in the case of Old Notes tendered by book-entry transfer into the
Exchange Agent's account at the Book-Entry Transfer Facility pursuant to the
book-entry transfer procedures described above, such Old Notes will be
credited to an account maintained with such Book-Entry Transfer Facility for
the Old Notes) as soon as practicable after withdrawal, rejection of tender or
termination of the Exchange Offer. Properly withdrawn Old Notes may be
retendered by following one of the procedures described under "--Procedures
for Tendering Old Notes" above at any time on or prior to the Expiration Date.
CERTAIN CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provisions of the Exchange Offer, and subject to
its obligations pursuant to the Registration Rights Agreement, the Company
shall not be required to accept for exchange, or to issue New Notes in
exchange for, any Old Notes and may terminate or amend the Exchange Offer, if
at any time before the acceptance of such New Notes for exchange, any of the
following events shall occur:
(i) any injunction, order or decree shall have been issued by any court
or any governmental agency that would prohibit, prevent or otherwise
materially impair the ability of the Company to proceed with the Exchange
Offer; or
(ii) the Exchange Offer will violate any applicable law or any applicable
interpretation of the staff of the SEC.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company in whole or in part at any time and from time to time
in its sole discretion. The failure by the Company at any time to exercise any
of the foregoing rights shall not be deemed a waiver of any such right and
such right shall be deemed an ongoing right which may be asserted at any time
and from time to time.
In addition, the Company will not accept for exchange any Old Notes
tendered, and no New Notes will be issued in exchange for any such Old Notes,
if at such time any stop order is threatened by the SEC or in effect with
respect to the Registration Statement of which this Prospectus is a part or
the qualification of the Indenture under the Trust Indenture Act of 1939, as
amended.
The Exchange Offer is not conditioned on any minimum principal amount of Old
Notes being tendered for exchange.
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<PAGE>
EXCHANGE AGENT
Fleet National Bank has been appointed as the Exchange Agent for the
Exchange Offer. All executed Letters of Transmittal should be directed to the
Exchange Agent at the address set forth below. Questions and requests for
assistance, requests for additional copies of this Prospectus or of the Letter
of Transmittal and requests or Notices of Guaranteed Delivery should be
directed to the Exchange Agent addressed as follows:
Fleet National Bank, Exchange Agent
By Mail:
777 Main Street
Hartford, Connecticut 06115
Attention: Corporate Trust Administration
By Facsimile:
(860) 986-7920
DELIVERY OF THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH
ABOVE DOES NOT CONSTITUTE A VALID DELIVERY OF SUCH LETTER OF TRANSMITTAL.
The Exchange Agent also acts as trustee under the Indenture.
FEES AND EXPENSES
The Company will not make any payment to brokers, dealers, or others
soliciting acceptances of the Exchange Offer.
The estimated cash expenses to be incurred in connection with the Exchange
Offer will be paid by the Company and are estimated in the aggregate to be
$ .
TRANSFER TAXES
Holders who tender their Old Notes for exchange will not be obligated to pay
any transfer taxes in connection therewith, except that Holders who instruct
the Company to register New Notes in the name of, or request that Old Notes
not tendered or not accepted in the Exchange Offer be returned to, a person
other than the registered tendering holder will be responsible for the payment
of any applicable transfer tax thereon.
CONSEQUENCES OF FAILURE TO EXCHANGE OLD NOTES
Holders of Old Notes who do not exchange their Old Notes for New Notes
pursuant to the Exchange Offer will continue to be subject to the provisions
in the Indenture regarding transfer and exchange of the Old Notes and the
restrictions on transfer of such Old Notes as set forth in the legend thereon
as a consequence of the issuance of the Old Notes pursuant to exemptions from,
or in transactions not subject to, the registration requirements of the
Securities Act and applicable state securities laws. In general, the Old Notes
may not be offered or sold, unless registered under the Securities Act and
applicable state securities laws. The Company does not currently anticipate
that it will register Old Notes under the Securities Act. See "Description of
the Notes--Exchange Offer; Registration Rights." Based on interpretations by
the staff of the SEC, as set forth in no-action letters issued to third
parties, the Company believes that New Notes issued pursuant to the Exchange
Offer in exchange for Old Notes may be offered for resale, resold or otherwise
transferred by holders thereof (other than any such holder which is an
"affiliate" of the Company within the meaning of Rule 405 under the Securities
Act) without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that such New Notes are acquired in
the ordinary course or such holders' business and such holders, other than
broker-dealers, have no arrangement or understanding with any person to
participate in the distribution of such New Notes. However, the SEC has not
considered the Exchange Offer in the context of a no-action letter
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and there can be no assurance that the staff of the SEC would make a similar
determination with respect to the Exchange Offer as in such other
circumstances. Each Holder, other than a broker-dealer, must acknowledge that
it is not engaged in, and does not intend to engage in, a distribution of such
New Notes and has no arrangement or understanding to participate in a
distribution of New Notes. If any Holder is an affiliate of the Company or is
engaged in or intends to engage in or has any arrangement or understanding
with respect to the distribution of the New Notes to be acquired pursuant to
the Exchange Offer, such Holder (i) may not rely on the applicable
interpretations of the staff of the SEC and (ii) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction. Each broker-dealer that receives New
Notes for its own account in exchange for Old Notes pursuant to the Exchange
Offer must acknowledge that such Old Notes were acquired by such broker-dealer
as a result of market-making activities or other trading activities and that
it will deliver a prospectus in connection with any resale of such New Notes.
The Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it
may be amended or supplemented from time to time, may be used by a broker-
dealer in connection with resales of New Notes received in exchange for Old
Notes where such Old Notes were acquired by such broker-dealer as a result of
market-making activities or other trading activities. The Company has agreed
that, for a period of 180 days after the Expiration Date, it will make this
Prospectus available to any broker-dealer for use in connection with any such
resale. See "Plan of Distribution." In addition, to comply with the securities
laws of certain jurisdictions, if applicable, the New Notes may not be offered
or sold unless they have been registered or qualified for sale in such
jurisdictions or an exemption from registration or qualification is available
and is complied with. The Company has agreed, pursuant to the Registration
Rights Agreement, subject to certain limitations specified therein, to
register or qualify the New Notes for offer or sale under the securities laws
of such jurisdictions as any holder reasonably requests in writing. Unless a
holder so requests, the Company does not currently intend to register or
qualify the sale of the New Notes in any such jurisdictions. See "The Exchange
Offer."
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DESCRIPTION OF NOTES
GENERAL
The Old Notes were issued under an Indenture, dated as of November 15, 1996
(the "Indenture"), between the Company and Fleet National Bank, as Trustee
(the "Trustee"). The New Notes also will be issued under the Indenture. The
Old Notes and New Notes will be treated as a single class of securities under
the Indenture.
The following is a summary of certain provisions of the Indenture and the
Notes, a copy of which Indenture and the form of Notes are filed as exhibits
to the Registration Statement of which this Prospectus is a part. The
following summary does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, all the provisions of the Indenture
and the Notes, including the definitions of certain terms therein and those
terms made a part thereof by the Trust Indenture Act of 1939, as amended.
Certain terms used herein are defined below under "--Certain Definitions." The
term "Notes" means the Old Notes and the New Notes, treated as a single class.
The Old Notes are, and the New Notes will be, general unsecured obligations
of the Company, rank senior in right of payment to all subordinated
Indebtedness of the Company and rank pari passu in right of payment with all
senior borrowings, including all borrowings under the Credit Agreement. At
September 30, 1996, on a pro forma basis after giving effect to the Offering
and the Acquisitions the aggregate principal amount of Indebtedness (excluding
trade payables, other accrued liabilities and the Notes) of the Company and
its Subsidiaries would have had approximately $3.1 million of Indebtedness,
none of which would have ranked effectively senior to the Notes. The Indenture
limits the ability of the Company and its Subsidiaries to incur additional
Indebtedness. However, under certain circumstances, the Company and its
Subsidiaries will be permitted to incur secured Indebtedness, including
Indebtedness under the Credit Agreement, with respect to which the Notes would
be effectively subordinated to the extent of the assets securing such
Indebtedness.
The operations of the Company are conducted through its Subsidiaries and,
therefore, the Company is dependent upon the cash flow of its Subsidiaries to
meet its obligations, including its obligations under the Notes. Except to the
extent of the Subsidiary Guarantees, the Notes are effectively subordinated to
all indebtedness and other liabilities and commitments (including trade
payables and lease obligations) of the Company's Subsidiaries. Any right of
the Company to receive assets of any of its Subsidiaries upon the latter's
liquidation or reorganization (and the consequent right of the holders of the
Notes to participate in those assets) will be effectively subordinated to the
claims of that Subsidiary's creditors, except to the extent that the Company
is itself recognized as a creditor of such Subsidiary, in which case the
claims of the Company would still be subordinate to any security in the assets
of such Subsidiary and any indebtedness of such Subsidiary senior to that held
by the Company. The Company's foreign Subsidiaries are not, and will not be,
Guarantors of the Notes. See "--Subsidiary Guarantees."
PRINCIPAL, MATURITY AND INTEREST
The Notes are in an aggregate principal amount of $110.0 million and will
mature on November 15, 2006. Interest on the Notes will accrue at the rate of
10 7/8% per annum and will be payable semi-annually in arrears on May 15 and
November 15, commencing on May 15, 1997, to holders of record on the
immediately preceding May 1 and November 1. Interest on the Notes will accrue
from the most recent date to which interest has been paid or, if no interest
has been paid, from the date of original issuance. Interest will be computed
on the basis of a 360-day year comprised of twelve 30-day months. Principal,
premium, if any, and interest on the Notes will be payable at the office or
agency of the Company maintained for such purpose within the City and State of
New York or, at the option of the Company, payment of interest may be made by
check mailed to the holders of the Notes at their respective addresses set
forth in the register of holders of Notes; provided that all payments with
respect to Notes the holders of which have given wire transfer instructions to
the Company will be required to be made by wire transfer of immediately
available funds to the accounts specified by the holders thereof.
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Until otherwise designated by the Company, the Company's office or agency in
New York will be the office of the Trustee maintained for such purpose. The
Notes will be issued in denominations of $1,000 and integral multiples
thereof.
Because of time-zone differences, the securities accounts of Euroclear or
Cedel Bank participants (each, a "Member Organization") purchasing an interest
in a Global Note from a Depositary Participant that is not a Member
Organization will be credited during the securities settlement processing day
(which must be a business day for Euroclear or Cedel Bank, as the case may be)
immediately following the Depositary settlement date. Transactions in
interests in a Global Note settled during any securities settlement processing
day will be reported to the relevant Member Organization on the same day. Cash
received in Euroclear or Cedel Bank as a result of sales of interests in a
Global Note by or through a Member Organization to a Depositary Participant
that is not a Member Organization will be received with value on the
Depositary settlement date, but will not be available in the relevant
Euroclear or Cedel Bank cash account until the business day following
settlement at the Depositary.
SUBSIDIARY GUARANTEES
The Company's payment obligations under the Old Notes are, and under the New
Notes will be, jointly and severally Guaranteed on a senior basis (the
"Subsidiary Guarantees") by the Guarantors. The Subsidiary Guarantees rank
pari passu in right of payment with all existing and future senior
Indebtedness of the Guarantors, including the obligations of the Guarantors
under the Credit Agreement and any successor credit facility. All of the
Company's current and future domestic Subsidiaries will be Guarantors. The
Company's foreign Subsidiaries are not Guarantors of the Notes. The
obligations of each Guarantor under its Subsidiary Guarantee will be limited
so as not to constitute a fraudulent conveyance under applicable law. See,
however, "Risk Factors--Fraudulent Conveyance; Possible Invalidity of
Subsidiary Guarantees."
The Indenture provides that no Guarantor may consolidate with or merge with
or into (whether or not such Guarantor is the surviving Person) another
corporation, Person or entity (other than the Company or another Guarantor),
unless (i) subject to the provisions of the following paragraph, the Person
formed by or surviving any such consolidation or merger (if other than such
Guarantor) assumes all the obligations of such Guarantor under the Notes and
the Indenture pursuant to a supplemental indenture, in form and substance
reasonably satisfactory to the Trustee; (ii) immediately after giving effect
to such transaction, no Default or Event of Default exists; (iii) such
Guarantor, or any Person formed by or surviving any such consolidation or
merger, would have Consolidated Net Worth (immediately after giving effect to
such transaction), equal to or greater than the Consolidated Net Worth of such
Guarantor immediately preceding the transaction; and (iv) the Company would be
permitted immediately after giving effect to such transaction, to incur at
least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage
Ratio test set forth in the covenant described above under the caption "--
Incurrence of Indebtedness and Issuance of Preferred Stock."
The Indenture provides that, in the event of (i) a sale or other disposition
of all of the assets of any Guarantor, by way of merger, consolidation or
otherwise, (ii) a sale or other disposition of all of the capital stock of any
Guarantor or (iii) a distribution of all of the capital stock of any Guarantor
to stockholders of the Company in a transaction that complies with the
covenant described below under "--Restricted Payments," such Guarantor (in the
event of a sale or other disposition, by way of such a merger, consolidation,
distribution or otherwise, of all of the capital stock of such Guarantor) or
the corporation acquiring the property (in the event of a sale or other
disposition of all of the assets of such Guarantor) will be released and
relieved of any obligations under its Subsidiary Guarantee; provided that the
Net Proceeds of such sale or other disposition are applied in accordance with
the applicable provisions of the Indenture. See "Repurchase at Option of
Holders--Asset Sales."
OPTIONAL REDEMPTION
The Notes will not be redeemable at the Company's option prior to November
15, 2001. Thereafter, the Notes will be subject to redemption at the option of
the Company, in whole or in part, upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of principal
amount) set forth
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below, plus accrued and unpaid interest thereon, if any, to the applicable
redemption date, if redeemed during the twelve-month period beginning on
November 15 of the years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2001............................................. 105.438%
2002............................................. 103.625%
2003............................................. 101.813%
2004 and thereafter.............................. 100.000%
</TABLE>
Notwithstanding the foregoing, at any time and from time to time prior to
November 15, 1999, the Company may redeem up to 30% of the originally issued
principal amount of Notes at a redemption price of 110 7/8% of the principal
amount thereof, plus accrued and unpaid interest thereon, if any, to the
redemption date, with the net proceeds of an initial public offering of common
stock of the Company or of Holdings (to the extent that the proceeds thereof
are contributed to the Company as common equity); provided that at least 70%
of the originally issued principal amount of Notes remains outstanding
immediately after the occurrence of such redemption; and provided, further,
that notice of such redemption shall be given within 30 days of the date of
the closing of such public offering of common stock of the Company.
SELECTION AND NOTICE
If less than all of the Notes are to be redeemed at any time, selection of
Notes for redemption will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which
the Notes are listed, or, if the Notes are not so listed, on a pro rata basis,
by lot or by such method as the Trustee shall deem fair and appropriate;
provided that no Notes of $1,000 or less shall be redeemed in part. Notices of
redemption shall be mailed by first class mail at least 30 but not more than
60 days before the redemption date to each holder of Notes to be redeemed at
its registered address. If any Note is to be redeemed in part only, the notice
of redemption that relates to such Note shall state the portion of the
principal amount thereof to be redeemed. A new Note in principal amount equal
to the unredeemed portion thereof will be issued in the name of the holder
thereof upon cancellation of the original Note. On and after the redemption
date, interest ceases to accrue on Notes or portions of them called for
redemption.
MANDATORY REDEMPTION
Except as set forth below under "Repurchase at the Option of Holders," the
Company is not required to make mandatory redemption or sinking fund payments
with respect to the Notes.
REPURCHASE AT THE OPTION OF HOLDERS
Change of Control
Upon the occurrence of a Change of Control, each holder of Notes will have
the right to require the Company to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of such holder's Notes pursuant to the
offer described below (the "Change of Control Offer") at an offer price in
cash equal to 101% of the aggregate principal amount thereof, plus accrued and
unpaid interest thereon, if any, to the date of purchase (the "Change of
Control Payment"). Within 25 days following any Change of Control, the Company
will mail a notice to each holder describing the transaction or transactions
that constitute the Change of Control and offering to repurchase Notes
pursuant to the procedures required by the Indenture and described in such
notice. The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change of Control, and the Company
will not be in violation of the Indenture by reason of any act required by
such rule or other applicable law.
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On a date that is at least 30 but no more than 60 days from the date on
which the Company mails notice of the Change of Control (the "Change of
Control Payment Date"), the Company will, to the extent lawful, (i) accept for
payment all Notes or portions thereof properly tendered pursuant to the Change
of Control Offer, (ii) deposit with the Paying Agent an amount equal to the
Change of Control Payment in respect of all Notes or portions thereof so
tendered and (iii) deliver or cause to be delivered to the Trustee the Notes
so accepted together with an officers' certificate stating the aggregate
principal amount of Notes or portions thereof being purchased by the Company.
The Paying Agent will promptly mail to each holder of Notes so tendered the
Change of Control Payment for such Notes, and the Trustee will promptly
authenticate and mail (or cause to be transferred by book-entry) to each
holder a new Note equal in principal amount to any unpurchased portion of the
Notes surrendered, if any; provided that each such new Note will be in a
principal amount of $1,000 or an integral multiple thereof. The Company will
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
The Change of Control provisions described above will be applicable whether
or not any other provisions of the Indenture are applicable. Except as
described above with respect to a Change of Control, the Indenture does not
contain provisions that permit the holders of the Notes to require that the
Company repurchase or redeem the Notes in the event of a takeover,
recapitalization or similar transaction.
The Company will not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set
forth in the Indenture applicable to a Change of Control Offer made by the
Company and purchases all Notes validly tendered and not withdrawn under such
Change of Control Offer.
The Company's ability to repurchase Notes upon a Change of Control may be
limited by, among other factors, the financial resources of the Company at the
time of repurchase. The Credit Agreement will prohibit the Company from
purchasing any Notes prior to their stated maturity and also will provide that
certain Change of Control events would constitute a default thereunder. In
addition, any future credit or other borrowing agreements may contain similar
restrictions. See "Risk Factors--Change of Control." If a Change of Control
occurs at a time when the Company is prohibited from purchasing the Notes, the
Company could seek the consent of its lender(s) to such purchase or could
attempt to refinance the borrowings that contain such prohibition. If the
Company does not obtain such a consent or repay such borrowings, the Company
would remain prohibited from purchasing Notes. In such case, the Company's
failure to purchase tendered Notes would constitute an Event of Default under
the Indenture.
The definition of Change of Control includes a phrase relating to the sale,
lease, transfer, conveyance or other disposition of "all or substantially all"
of the assets of the Company and its Subsidiaries taken as a whole. Although
there is a developing body of case law interpreting the phrase "all or
substantially all," there is no precise established definition of the phrase
under applicable law. Accordingly, the ability of a holder of Notes to require
the Company to repurchase such Notes as a result of a sale, lease, transfer,
conveyance or other disposition of less than all of the assets of the Company
and its Subsidiaries taken as a whole to another Person or group may be
uncertain.
Asset Sales
The Indenture provides that the Company will not, and will not permit any of
its Subsidiaries to, engage in an Asset Sale unless (i) the Company (or the
Subsidiary, as the case may be) receives consideration at the time of such
Asset Sale at least equal to the fair market value (evidenced by a resolution
of the Board of Directors set forth in an officers' certificate delivered to
the Trustee) of the assets or Equity Interests issued or sold or otherwise
disposed of and (ii) at least 80% of the consideration therefor received by
the Company or such Subsidiary is in the form of cash; provided that the
amount of (x) any liabilities (as shown on the Company's or such Subsidiary's
most recent balance sheet), of the Company or any Subsidiary (other than
contingent liabilities and liabilities that are by their terms subordinated to
the Notes or any Guarantee thereof) that are assumed by the transferee of any
such assets pursuant to any arrangement releasing the Company or such
Subsidiary from further liability and (y) any notes or other obligations
received by the Company or any such Subsidiary from
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such transferee that are immediately converted by the Company or such
Subsidiary into cash (to the extent of the cash received), shall be deemed to
be cash for purposes of this provision.
Within 360 days after the receipt of any Net Proceeds from an Asset Sale,
the Company may apply such Net Proceeds (a) to permanently reduce pari passu
Indebtedness (and to correspondingly reduce commitments with respect thereto)
or (b) to the acquisition of a controlling interest in another business, the
making of a capital expenditure or the acquisition of other long-term assets,
in each case, in the same or a similar line of business as the Company was
engaged in on the date of the Indenture. Pending the final application of any
such Net Proceeds, the Company may temporarily reduce revolving credit
Indebtedness under the Credit Agreement or otherwise invest such Net Proceeds
in any manner that is not prohibited by the Indenture. Any Net Proceeds from
Asset Sales that are not applied or invested as provided in the first sentence
of this paragraph will be deemed to constitute "Excess Proceeds." When the
aggregate amount of Excess Proceeds exceeds $5.0 million, the Company will be
required to make an offer to all holders of Notes (an "Asset Sale Offer") to
purchase the maximum principal amount of Notes that may be purchased out of
the Excess Proceeds, at an offer price in cash in an amount equal to 100% of
the principal amount thereof, plus accrued and unpaid interest, if any,
thereon to the date of purchase, in accordance with the procedures set forth
in the Indenture. To the extent that the aggregate amount of Notes tendered
pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company
may use any remaining Excess Proceeds for general corporate purposes. If the
aggregate principal amount of Notes surrendered by holders thereof exceeds the
amount of Excess Proceeds, the Trustee shall select the Notes to be purchased
on a pro rata basis. Upon completion of such offer to purchase, the amount of
Excess Proceeds shall be reset at zero.
CERTAIN COVENANTS
Restricted Payments
The Indenture provides that the Company will not, and will not permit any of
its Subsidiaries to, directly or indirectly, (i) declare or pay any dividend
or make any other payment or distribution on account of the Company's Equity
Interests (including, without limitation, any payment in connection with any
merger or consolidation involving the Company) or to the direct or indirect
holders of the Company's Equity Interests in their capacity as such (other
than dividends or distributions payable in Equity Interests (other than
Disqualified Stock) of the Company or dividends or distributions payable to
the Company or any Wholly Owned Subsidiary of the Company); (ii) purchase,
redeem or otherwise acquire or retire for value any Equity Interests of the
Company or any direct or indirect parent of the Company or other Affiliate of
the Company (other than Equity Interests of a Subsidiary of the Company);
(iii) make any principal payment on, or purchase, redeem, defease or otherwise
acquire or retire for value any Indebtedness that is subordinated to the Notes
or any Subsidiary Guarantee thereof, except at final maturity; or (iv) make
any Restricted Investment (all such payments and other actions set forth in
clauses (i) through (iv) above being collectively referred to as "Restricted
Payments"), unless, at the time of and after giving effect to such Restricted
Payment:
(A) no Default or Event of Default shall have occurred and be continuing
or would occur as a consequence thereof; and
(B) the Company would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made
at the beginning of the applicable four-quarter period, have been permitted
to incur at least $1.00 of additional Indebtedness pursuant to the Fixed
Charge Coverage Ratio test set forth in the first paragraph of the covenant
described below under caption "--Incurrence of Indebtedness and Issuance of
Preferred Stock"; and
(C) such Restricted Payment, together with the aggregate of all other
Restricted Payments made by the Company and its Subsidiaries after the date
of the Indenture (excluding Restricted Payments permitted by clauses (ii)
and (iii) of the next succeeding paragraph), is less than the sum of (1)
50% of the Consolidated Net Income of the Company for the period (taken as
one accounting period) from the beginning of the first fiscal quarter
commencing after the date of the Indenture to the end of the Company's
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most recently ended fiscal quarter for which internal financial statements
are available at the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a deficit, less 100% of such
deficit), plus (2) 100% of the aggregate net cash proceeds received by the
Company from the issue or sale since the date of the Indenture of Equity
Interests of the Company or of debt securities of the Company that have
been converted into such Equity Interests (other than Equity Interests (or
convertible debt securities) sold to a Subsidiary of the Company and other
than Disqualified Stock or debt securities that have been converted into
Disqualified Stock), plus (3) to the extent that any Restricted Investment
that was made after the date of the Indenture is sold for cash or otherwise
liquidated or repaid for cash, the lesser of (x) the cash return of capital
with respect to such Restricted Investment (less the cost of disposition,
if any) and (y) the initial amount of such Restricted Investment.
The foregoing provisions do not prohibit (i) the payment of any dividend
within 60 days after the date of declaration thereof, if at said date of
declaration such payment would have complied with the provisions of the
Indenture; (ii) the redemption, repurchase, retirement or other acquisition of
any Equity Interests of the Company in exchange for, or out of the proceeds
of, the substantially concurrent sale (other than to a Subsidiary of the
Company) of other Equity Interests of the Company (other than any Disqualified
Stock); provided that the amount of any such net cash proceeds that are
utilized for any such redemption, repurchase, retirement or other acquisition
shall be excluded from clause (C)(2) of the preceding paragraph; (iii) the
defeasance, redemption or repurchase of subordinated Indebtedness with the net
cash proceeds from an incurrence of Permitted Refinancing Debt or the
substantially concurrent sale (other than to a Subsidiary of the Company) of
Equity Interests of the Company (other than Disqualified Stock); provided that
the amount of any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement or other acquisition shall be excluded from
clause (C)(2) of the preceding paragraph; (iv) the payment of any distribution
or dividend to Holdings to enable Holdings to repurchase, redeem or otherwise
acquire or retire for value of any Equity Interests of Holdings, the Company
or any Subsidiary of the Company held by any member of the Company's (or any
of its Subsidiaries') management pursuant to any management equity
subscription agreement or stock option agreement; provided that the aggregate
price paid for all such repurchased, redeemed, acquired or retired Equity
Interests shall not exceed $500,000 in any twelve-month period plus the
aggregate cash proceeds received by the Company during such twelve-month
period from any reissuance of Equity Interests by the Company to members of
management of the Company and its Subsidiaries; and no Default or Event of
Default shall have occurred and be continuing immediately after such
transaction; and (v) payments in an aggregate amount not to exceed $3.0
million since the date of the Indenture in respect of the purchase, retirement
or redemption of Existing Indebtedness for an amount less than the face amount
thereof.
The amount of all Restricted Payments (other than cash) shall be the fair
market value (evidenced by a resolution of the Board of Directors set forth in
an officers' certificate delivered to the Trustee) on the date of the
Restricted Payment of the asset(s) proposed to be transferred by the Company
or such Subsidiary, as the case may be, pursuant to the Restricted Payment.
Not later than the date of making any Restricted Payment, the Company shall
deliver to the Trustee an officers' certificate stating that such Restricted
Payment is permitted and setting forth the basis upon which the calculations
required by the covenant entitled "Restricted Payments" were computed, which
calculations may be based upon the Company's latest available financial
statements.
Incurrence of Indebtedness and Issuance of Preferred Stock
The Indenture provides that the Company will not, and will not permit any of
its Subsidiaries to, directly or indirectly, create, incur, issue, assume,
Guarantee or otherwise become directly or indirectly liable, contingently or
otherwise, with respect to (collectively, "incur") any Indebtedness (including
Acquired Debt) and that the Company will not issue any Disqualified Stock and
will not permit any of its Subsidiaries to issue any shares of preferred
stock; provided, however, that the Company may incur Indebtedness (including
Acquired Debt), and the Guarantors may guarantee such Indebtedness, and the
Company may issue shares of Disqualified Stock, if the Fixed Charge Coverage
Ratio for the Company's most recently ended four full fiscal quarters for
which internal financial statements are available immediately preceding the
date on which such additional Indebtedness is incurred or such Disqualified
Stock is issued would have been at least 2.0 to 1, determined on a pro forma
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basis (including a pro forma application of the net proceeds therefrom), as if
the additional Indebtedness had been incurred, or the Disqualified Stock had
been issued, as the case may be, at the beginning of such four-quarter period.
The foregoing provisions do not apply to: (i) the incurrence by the Company
(and Guarantees thereof by the Guarantors) of Indebtedness for working capital
purposes and letters of credit pursuant to the Credit Agreement (with letters
of credit being deemed to have a principal amount equal to the maximum
potential liability of the Company and its Subsidiaries thereunder) in an
aggregate principal amount not to exceed as of any date of incurrence the
greater of (A) $25.0 million and (B) the amount of the Borrowing Base; (ii)
the incurrence by the Company and its Subsidiaries of the Existing
Indebtedness; (iii) the incurrence by the Company and its Subsidiaries of the
Indebtedness represented by the Notes and the Subsidiary Guarantees; (iv) the
incurrence by the Company or any of its Subsidiaries of Indebtedness
represented by Capital Lease Obligations, mortgage financings or purchase
money obligations, in each case, incurred for the purpose of financing all or
any part of the purchase price or cost of construction or improvement of
property, plant or equipment used in the business of the Company or such
Subsidiary, in an aggregate principal amount not to exceed $5.0 million at any
time outstanding; (v) the incurrence by the Company or any of its Subsidiaries
of Permitted Refinancing Debt in exchange for, or the net proceeds of which
are used to extend, refinance, renew, replace, defease or refund, Indebtedness
that was permitted by the Indenture to be incurred; (vi) the incurrence by the
Company or any of its Subsidiaries of intercompany Indebtedness between or
among the Company and any of its Wholly Owned Subsidiaries; provided, however,
that (i) if the Company is the obligor on such Indebtedness, such Indebtedness
is expressly subordinate to the payment in full of all Obligations with
respect to the Notes and (ii)(A) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being held by a Person other
than the Company or a Wholly Owned Subsidiary and (B) any sale or other
transfer of any such Indebtedness to a Person that is not either the Company
or a Wholly Owned Subsidiary shall be deemed, in each case, to constitute an
incurrence of such Indebtedness by the Company or such Subsidiary, as the case
may be; (vii) the incurrence by the Company or any of its Subsidiaries of
Hedging Obligations that are incurred for the purpose of fixing or hedging
interest rate risk with respect to any floating rate Indebtedness that is
permitted by the terms of this Indenture to be outstanding; (viii) the
incurrence by the Company or any of its Subsidiaries of Indebtedness (in
addition to Indebtedness permitted by any other clause of this paragraph) in
an aggregate principal amount (or accreted value, as applicable) at any time
outstanding not to exceed $10.0 million; and (ix) the incurrence by the
Company or any of its Subsidiaries of Earn-out Obligations in an aggregate
amount not to exceed $5.0 million at any time outstanding.
For purposes of determining compliance with the covenant described above
under "--Incurrence of Indebtedness and Issuance of Preferred Stock," in the
event that an item of Indebtedness meets the criteria of more than one of the
categories of Indebtedness described in clauses (i) through (ix) of the
immediately preceding paragraph, the Company shall, in its sole discretion,
classify such item of Indebtedness in any manner that complies with this
covenant and will only be required to include the amount and type of such
Indebtedness in one of such clauses or pursuant to the first paragraph of this
covenant. Accrual of interest, accretion of accreted value and issuance of
securities paid-in-kind shall not be deemed to be an incurrence of
Indebtedness for purposes of this covenant.
Liens
The Indenture provides that the Company will not, and will not permit any of
its Subsidiaries to, directly or indirectly, create, incur, assume or suffer
to exist any Lien on any asset now owned or hereafter acquired, or any income
or profits therefrom or assign or convey any right to receive income
therefrom, other than Permitted Liens.
Dividend and Other Payment Restrictions Affecting Subsidiaries
The Indenture provides that the Company will not, and will not permit any of
its Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on the
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ability of any Subsidiary to (a)(i) pay dividends or make any other
distributions to the Company or any of its Subsidiaries (A) on its Capital
Stock or (B) with respect to any other interest or participation in, or
measured by, its profits, or (ii) pay any indebtedness owed to the Company or
any of its Subsidiaries, (b) make loans or advances to the Company or any of
its Subsidiaries or (c) transfer any of its properties or assets to the
Company or any of its Subsidiaries, except for such encumbrances or
restrictions existing under or by reason of (i) Existing Indebtedness as in
effect on the date of the Indenture, (ii) the Credit Agreement as in effect as
of the date of the Indenture, and any amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings
thereof, provided that such amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacement or refinancings are no more
restrictive with respect to such dividend and other payment restrictions than
those contained in the Credit Agreement as in effect on the date of the
Indenture, (iii) the Indenture and the Notes, (iv) applicable law, (v) by
reason of customary non-assignment provisions in leases, licenses and other
agreements entered into in the ordinary course of business and consistent with
past practices, (vi) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions of the nature described
in clause (c) above on the property so acquired, or (vii) Permitted
Refinancing Debt, provided that the restrictions contained in the agreements
governing such Permitted Refinancing Debt are no more restrictive than those
contained in the agreements governing the Indebtedness being refinanced.
Merger, Consolidation, or Sale of Assets
The Indenture provides that the Company may not consolidate or merge with or
into (whether or not the Company is the surviving corporation), or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially
all of its properties or assets in one or more related transactions, to
another corporation, Person or entity unless (i) the Company is the surviving
corporation or the entity or the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made is a corporation organized or existing under the laws of the United
States, any state thereof or the District of Columbia; (ii) the entity or
Person formed by or surviving any such consolidation or merger (if other than
the Company) or the entity or Person to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made assumes all the
Obligations of the Company under the Notes and the Indenture pursuant to a
supplemental indenture in a form reasonably satisfactory to the Trustee; (iii)
immediately after such transaction no Default or Event of Default exists; and
(iv) except in the case of a merger of the Company with or into a Wholly Owned
Subsidiary of the Company, the Company or the entity or Person formed by or
surviving any such consolidation or merger (if other than the Company), or to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made (A) will have Consolidated Net Worth immediately after
the transaction equal to or greater than the Consolidated Net Worth of the
Company immediately preceding the transaction and (B) will, at the time of
such transaction and after giving pro forma effect thereto as if such
transaction had occurred at the beginning of the applicable four-quarter
period, be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in the first
paragraph of the covenant described above under the caption "--Incurrence of
Indebtedness and Issuance of Preferred Stock."
Transactions with Affiliates
The Indenture provides that the Company will not, and will not permit any of
its Subsidiaries to, make any payment to, or sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any contract,
agreement, understanding, loan, advance or Guarantee with, or for the benefit
of, any Affiliate (each of the foregoing, an "Affiliate Transaction"), unless
(i) such Affiliate Transaction is on terms that are no less favorable to the
Company or the relevant Subsidiary than those that would have been obtained in
a comparable transaction by the Company or such Subsidiary with an unrelated
Person and (ii) the Company delivers to the Trustee (A) with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $1.0 million, a resolution of the Board
of Directors set forth in an officers' certificate certifying that such
Affiliate Transaction complies with clause (i) above and that such Affiliate
Transaction has been approved by a majority of the disinterested
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members of the Board of Directors and (B) with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
consideration in excess of $5.0 million, an opinion as to the fairness to the
holders of such Affiliate Transaction from a financial point of view issued by
an accounting, appraisal or investment banking firm of national standing;
provided that (w) the payment of Earn-out Obligations pursuant to agreements
entered into at such time as the recipient of such payments was not an
Affiliate of the Company or such Subsidiary, (x) any employment agreement
entered into by the Company or any of its Subsidiaries in the ordinary course
of business and consistent with the past practice of the Company or such
Subsidiary, (y) transactions between or among the Company and/or its
Subsidiaries and (z) Restricted Payments and Permitted Investments that are
permitted by the provisions of the Indenture described above under "--
Restricted Payments," in each case, shall not be deemed Affiliate
Transactions.
Sale and Leaseback Transactions
The Indenture provides that the Company will not, and will not permit any of
its Subsidiaries to, enter into any sale and leaseback transaction; provided
that the Company may enter into a sale and leaseback transaction if (a) the
Company could have (i) incurred Indebtedness in an amount equal to the
Attributable Debt relating to such sale and leaseback transaction pursuant to
the Fixed Charge Coverage Ratio test set forth in the first paragraph of the
covenant described above under the caption "--Incurrence of Indebtedness and
Issuance of Preferred Stock" and (ii) incurred a Lien to secure such
Indebtedness pursuant to the covenant described above under the caption "--
Liens," (b) the gross cash proceeds of such sale and leaseback transaction are
at least equal to the fair market value (as determined in good faith by the
Board of Directors and set forth in an officers' certificate delivered to the
Trustee) of the property that is the subject of such sale and leaseback
transaction and (c) the transfer of assets in such sale and leaseback
transaction is permitted by, and the Company applies the proceeds of such
transaction in compliance with, the covenant described above under the caption
"--Asset Sales."
Limitation on Issuances and Sales of Capital Stock of Wholly Owned
Subsidiaries
The Indenture provides that the Company (a) will not, and will not permit
any Wholly Owned Subsidiary of the Company to, transfer, convey, sell, lease
or otherwise dispose of any Capital Stock of any Wholly Owned Subsidiary of
the Company to any Person (other than the Company or a Wholly Owned Subsidiary
of the Company), unless (i) such transfer, conveyance, sale, lease or other
disposition is of all the Capital Stock of such Wholly Owned Subsidiary and
(ii) the Net Proceeds from such transfer, conveyance, sale, lease or other
disposition are applied in accordance with the covenant described above under
the caption "--Asset Sales," provided that this clause (a) shall not apply to
any pledge of Capital Stock of any Subsidiary of the Company securing
Indebtedness under the Credit Agreement, and (b) will not permit any Wholly
Owned Subsidiary of the Company to issue any of its Equity Interests (other
than, if necessary, shares of its Capital Stock constituting directors'
qualifying shares) to any Person other than to the Company or a Wholly Owned
Subsidiary of the Company.
Additional Subsidiary Guarantees
The Indenture provides that if the Company or any of its Subsidiaries shall
acquire or create another domestic Subsidiary after the date of the Indenture,
then such newly acquired or created Subsidiary shall execute a Subsidiary
Guarantee and deliver an opinion of counsel, in accordance with the terms of
the Indenture; provided that the foregoing provision shall not apply to any
Subsidiary to the extent that (i) in the opinion of counsel to the Company,
such Subsidiary is unable to execute a Subsidiary Guarantee by reason of any
legal or regulatory prohibition or restriction and (ii) such Subsidiary is
not, directly or indirectly, an obligor under the Credit Agreement or any
other bank facility.
Payments for Consent
The Indenture provides that neither the Company nor any of its Subsidiaries
will, directly or indirectly, pay or cause to be paid any consideration,
whether by way of interest, fee or otherwise, to any holder of any Notes
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for or as an inducement to any consent, waiver or amendment of any of the
terms or provisions of the Indenture or the Notes unless such consideration is
offered to be paid or is paid to all holders of the Notes that consent, waive
or agree to amend in the time frame set forth in the solicitation documents
relating to such consent, waiver or agreement.
Reports
The Indenture provides that, whether or not required by the rules and
regulations of the Securities and Exchange Commission (the "Commission"), so
long as any Notes are outstanding, the Company will furnish to the holders of
Notes (a) commencing for the fiscal quarter ending December 31, 1996, all
quarterly and annual financial information that would be required to be
contained in a filing with the Commission on Forms 10-Q and 10-K if the
Company were required to file such Forms, including a "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and, with
respect to the annual information only, a report thereon by the Company's
certified independent accountants and (b) commencing for the fiscal quarter
ending December 31, 1996, all current reports that would be required to be
filed with the Commission on Form 8-K if the Company were required to file
such reports. In addition, whether or not required by the rules and
regulations of the Commission, the Company will file a copy of all such
information and reports with the Commission for public availability (unless
the Commission will not accept such a filing) and make such information
available to securities analysts and prospective investors upon request. In
addition, the Company and the Subsidiary Guarantors have agreed that, for so
long as any Notes remain outstanding, they will furnish to the holders and to
securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
EVENTS OF DEFAULT AND REMEDIES
The Indenture provides that each of the following constitutes an Event of
Default: (i) default for 30 days in the payment when due of interest on the
Notes; (ii) default in payment when due of the principal of, or premium, if
any, on, the Notes; (iii) failure by the Company to comply with the provisions
described under the captions "--Change of Control," "--Asset Sales," "--
Restricted Payments" or "--Incurrence of Indebtedness and Issuance of
Preferred Stock"; (iv) failure by the Company for 60 days after notice to
comply with any of its other agreements in the Indenture or the Notes; (v)
default under any mortgage, indenture or instrument under which there may be
issued or by which there may be secured or evidenced any Indebtedness for
money borrowed by the Company or any of its Subsidiaries (or the payment of
which is Guaranteed by the Company or any of its Subsidiaries) whether such
Indebtedness or Guarantee now exists, or is created after the date of the
Indenture, which default (A) is caused by a failure to pay principal of or
premium, if any, or interest on such Indebtedness on or prior to the
expiration of the grace period provided in such Indebtedness on the date of
such default (a "Payment Default") or (B) results in the acceleration of such
Indebtedness prior to its express maturity and, in each case, the principal
amount of any such Indebtedness, together with the principal amount of any
other such Indebtedness under which there has been a Payment Default or the
maturity of which has been so accelerated, aggregates $5.0 million or more;
(vi) failure by the Company or any of its Subsidiaries to pay final judgments
aggregating in excess of $5.0 million, which judgments are not paid,
discharged or stayed for a period of 60 days; (vii) except as permitted by the
Indenture, any Subsidiary Guarantee shall be held in any judicial proceeding
to be unenforceable or invalid or shall cease for any reason to be in full
force and effect or any Guarantor, or any Person acting on behalf of any
Guarantor, shall deny or disaffirm its obligations under its Subsidiary
Guarantee; and (ix) certain events of bankruptcy or insolvency with respect to
the Company or any of its Subsidiaries.
If any Event of Default occurs and is continuing, the Trustee or the holders
of at least 25% in principal amount of the then outstanding Notes may declare
all the Notes to be due and payable immediately. Notwithstanding the
foregoing, in the case of an Event of Default arising from certain events of
bankruptcy or insolvency, with respect to the Company, any Significant
Subsidiary or any group of Subsidiaries that, taken together, would constitute
a Significant Subsidiary, all outstanding Notes will become due and payable
without further action or notice. Holders of the Notes may not enforce the
Indenture or the Notes except as provided in
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the Indenture. Subject to certain limitations, holders of a majority in
principal amount of the then outstanding Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from holders of the
Notes notice of any continuing Default or Event of Default (except a Default
or Event of Default relating to the payment of principal or interest) if it
determines that withholding notice is in their interest.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have
had to pay if the Company then had elected to redeem the Notes pursuant to the
optional redemption provisions of the Indenture, an equivalent premium shall
also become and be immediately due and payable to the extent permitted by law
upon the acceleration of the Notes. If an Event of Default occurs prior to
November 15, 2001 by reason of any willful action (or inaction) taken (or not
taken) by or on behalf of the Company with the intention of avoiding the
prohibition on redemption of the Notes prior to November 15, 2001, then the
premium specified in the Indenture shall also become immediately due and
payable to the extent permitted by law upon the acceleration of the Notes.
The holders of a majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may on behalf of the holders of all of
the Notes waive any existing Default or Event of Default and its consequences
under the Indenture except a continuing Default or Event of Default in the
payment of interest on, or the principal of, the Notes.
The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Company is required upon
becoming aware of any Default or Event of Default, to deliver to the Trustee a
statement specifying such Default or Event of Default.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
No director, officer, employee, incorporator or stockholder of the Company,
as such, shall have any liability for any obligations of the Company under the
Notes, the Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each holder of Notes by accepting a
Note waives and releases all such liability. The waiver and release are part
of the consideration for issuance of the Notes. Such waiver may not be
effective to waive liabilities under the federal securities laws and it is the
view of the Commission that such a waiver is against public policy.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The Company may, at its option and at any time, elect to have all of its
obligations discharged with respect to the outstanding Notes ("Legal
Defeasance") except for (i) the rights of holders of outstanding Notes to
receive payments in respect of the principal of, premium, if any, and interest
on such Notes when such payments are due from the trust referred to below,
(ii) the Company's obligations with respect to the Notes concerning issuing
temporary Notes, registration of Notes, mutilated, destroyed, lost or stolen
Notes and the maintenance of an office or agency for payment and money for
security payments held in trust, (iii) the rights, powers, trusts, duties and
immunities of the Trustee, and the Company's obligations in connection
therewith and (iv) the Legal Defeasance provisions of the Indenture. In
addition, the Company may, at its option and at any time, elect to have the
obligations of the Company released with respect to certain covenants that are
described in the Indenture ("Covenant Defeasance") and thereafter any omission
to comply with such obligations shall not constitute a Default or Event of
Default with respect to the Notes. In the event Covenant Defeasance occurs,
certain events (not including non-payment, bankruptcy, receivership,
rehabilitation and insolvency events) described under "Events of Default" will
no longer constitute an Event of Default with respect to the Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance, (i) the
Company must irrevocably deposit with the Trustee, in trust, for the benefit
of the holders of the Notes, cash in U.S. dollars, non-callable Government
Securities, or a combination thereof, in such amounts as will be sufficient,
in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, premium, if any, and
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interest on the outstanding Notes on the stated maturity or on the applicable
redemption date, as the case may be, and the Company must specify whether the
Notes are being defeased to maturity or to a particular redemption date; (ii)
in the case of Legal Defeasance, the Company shall have delivered to the
Trustee an opinion of counsel in the United States reasonably acceptable to
the Trustee confirming that (A) the Company has received from, or there has
been published by, the Internal Revenue Service a ruling or (B) since the date
of the Indenture, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such opinion of
counsel shall confirm that, the holders of the outstanding Notes will not
recognize income, gain or loss for federal income tax purposes as a result of
such Legal Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case
if such Legal Defeasance had not occurred; (iii) in the case of Covenant
Defeasance, the Company shall have delivered to the Trustee an opinion of
counsel in the United States reasonably acceptable to the Trustee confirming
that the holders of the outstanding Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such Covenant Defeasance
and will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred; (iv) no Default or Event of Default shall have
occurred and be continuing on the date of such deposit (other than a Default
or Event of Default resulting from the borrowing of funds to be applied to
such deposit) or insofar as Events of Default from bankruptcy or insolvency
events are concerned, at any time in the period ending on the 91st day after
the date of deposit; (v) such Legal Defeasance or Covenant Defeasance will not
result in a breach or violation of, or constitute a default under, any
material agreement or instrument (other than the Indenture) to which the
Company or any of its Subsidiaries is a party or by which the Company or any
of its Subsidiaries is bound; (vi) the Company must have delivered to the
Trustee an opinion of counsel to the effect that after the 91st day following
the deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally; (vii) the Company must deliver to the Trustee an
officers' certificate stating that the deposit was not made by the Company
with the intent of preferring the holders of Notes over the other creditors of
the Company with the intent of defeating, hindering, delaying or defrauding
creditors of the Company or others; and (viii) the Company must deliver to the
Trustee an officers' certificate and an opinion of counsel, each stating that
all conditions precedent provided for relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
TRANSFER AND EXCHANGE
A holder may transfer or exchange Notes in accordance with the Indenture.
The Registrar and the Trustee may require a holder, among other things, to
furnish appropriate endorsements and transfer documents and the Company may
require a holder to pay any taxes and fees required by law or permitted by the
Indenture. The Company is not required to transfer or exchange any Note
selected for redemption. Also, the Company is not required to transfer or
exchange any Note for a period of 15 days before a selection of Notes to be
redeemed. The registered holder of a Note will be treated as the owner of it
for all purposes.
AMENDMENT, SUPPLEMENT AND WAIVER
Except as provided below, the Indenture or the Notes may be amended or
supplemented with the consent of the holders of at least a majority in
principal amount of the Notes then outstanding (including, without limitation,
consents obtained in connection with a purchase of, or tender offer or
exchange offer for, Notes), and any existing default or compliance with any
provision of the Indenture or the Notes may be waived with the consent of the
holders of a majority in principal amount of the then outstanding Notes
(including consents obtained in connection with a tender offer or exchange
offer for Notes).
Without the consent of each holder affected, an amendment or waiver may not
(with respect to any Notes held by a non-consenting holder): (i) reduce the
principal amount of Notes whose holders must consent to an amendment,
supplement or waiver, (ii) reduce the principal of or change the fixed
maturity of any Note or alter the provisions with respect to the redemption of
the Notes (other than provisions relating to the covenants described above
under the caption "--Repurchase at the Option of Holders"), (iii) reduce the
rate of or change
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the time for payment of interest on any Note, (iv) waive a Default or Event of
Default in the payment of principal of or premium, if any, or interest on the
Notes (except a rescission of acceleration of the Notes by the holders of at
least a majority in aggregate principal amount of the then outstanding Notes
and a waiver of the payment default that resulted from such acceleration), (v)
make any Note payable in money other than that stated in the Notes, (vi) make
any change in the provisions of the Indenture relating to waivers of past
Defaults or the rights of holders of Notes to receive payments of principal of
or premium, if any, or interest on the Notes, (vii) waive a redemption payment
with respect to any Note (other than a payment required by one of the
covenants described above under the caption "--Repurchase at the Option of
Holders") or (viii) make any change in the foregoing amendment and waiver
provisions.
Without the consent of at least 75% in principal amount of the Notes then
outstanding (including consents obtained in connection with a purchase of, or
tender offer or exchange offer for, Notes), no waiver or amendment to the
Indenture may make any change in the provisions described above under the
captions "--Change of Control" and "--Asset Sales" that adversely affect the
rights of any holder of Notes.
Notwithstanding the foregoing, without the consent of any holder of Notes,
the Company and the Trustee may amend or supplement the Indenture or the Notes
to cure any ambiguity, defect or inconsistency, to provide for uncertificated
Notes in addition to or in place of certificated Notes, to provide for the
assumption of the Company's obligations to holders of Notes in the case of a
merger or consolidation, to make any change that would provide any additional
rights or benefits to the holders of Notes or that does not adversely affect
the legal rights under the Indenture of any such holder, or to comply with
requirements of the Commission in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act.
CONCERNING THE TRUSTEE
The Indenture contains certain limitations on the rights of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases, or to realize on certain property received in respect of any
such claim as security or otherwise. The Trustee will be permitted to engage
in other transactions; however, if it acquires any conflicting interest it
must eliminate such conflict within 90 days, apply to the Commission for
permission to continue or resign.
The holders of a majority in principal amount of the then outstanding Notes
will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee, subject to
certain exceptions. The Indenture provides that, in case an Event of Default
shall occur (which shall not be cured), the Trustee will be required, in the
exercise of its power, to use the degree of care of a prudent man in the
conduct of his own affairs. Subject to such provisions, the Trustee will be
under no obligation to exercise any of its rights or powers under the
Indenture at the request of any holder of Notes, unless such holder shall have
offered to the Trustee security and indemnity satisfactory to it against any
loss, liability or expense.
GOVERNING LAW
The Indenture and the Notes are governed by, and will be construed in
accordance with, the laws of the State of New York.
CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture for a full disclosure of all such terms, as well as
any other capitalized terms used herein for which no definition is provided.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person,
including, without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person at the time such asset
is acquired by such specified Person.
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"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled
by" and "under common control with"), as used with respect to any Person,
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such Person, whether
through the ownership of voting securities, by agreement or otherwise;
provided that beneficial ownership of 10% or more of the voting securities of
a Person shall be deemed to be control.
"Asset Sale" means (i) the sale, lease, conveyance or other disposition of
any assets (including, without limitation, by way of a sale and leaseback)
other than sales of inventory in the ordinary course of business consistent
with past practices (provided that the sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Company and its
Subsidiaries taken as a whole will be governed by the provisions of the
Indenture described above under the caption "--Change of Control" and/or the
provisions described above under the caption "--Merger, Consolidation or Sale
of Assets" and not by the provisions described under the caption "--Asset
Sales"), and (ii) the issue or sale by the Company or any of its Subsidiaries
of Equity Interests of any of the Company's Subsidiaries, in the case of
either clause (i) or (ii), whether in a single transaction or a series of
related transactions (A) that have a fair market value in excess of $1.0
million or (B) for net proceeds in excess of $1.0 million. Notwithstanding the
foregoing, (i) a transfer of assets by the Company to a Wholly Owned
Subsidiary that is a Guarantor, or by a Wholly Owned Subsidiary to the Company
or to another Wholly Owned Subsidiary that is a Guarantor, (ii) an issuance of
Equity Interests by a Wholly Owned Subsidiary to the Company or to another
Wholly Owned Subsidiary that is a Guarantor, and (iii) a Restricted Payment or
Permitted Investment that is permitted by the covenant described above under
the caption "--Restricted Payments" will not be deemed to be Asset Sales.
"Attributable Debt" in respect of a sale and leaseback transaction means, at
the time of determination, the present value (discounted at the rate of
interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such sale and leaseback transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).
"Borrowing Base" means the sum of the following: (i) 100% of cash held
overnight in store safes; (ii) 100% of balances held in store accounts; (iii)
100% of checks held in store safes; (iv) 100% of clearing house transfers
initiated on the previous day and transfers of same-day funds to be credited
to store accounts; (v) 100% of cash held overnight by armored car carriers,
(vi) 100% of eligible government receivables in respect of government
contracts and (vii) 100% of cash balances held in demand deposit accounts
and/or investment accounts. The Borrowing Base shall be determined by the
Company upon each incurrence of Indebtedness, and such determination shall be
conclusive so long as it is made in good faith.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership, partnership interests
(whether general or limited) and (iv) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii) securities issued
or directly and fully Guaranteed or insured by the United States government or
any agency or instrumentality thereof having maturities of not more than six
months from the date of acquisition, (iii) certificates of deposit and
eurodollar time deposits with maturities of six months or less from the date
of acquisition, bankers' acceptances with maturities not exceeding six months
and overnight bank deposits, in each case with any lender party to the Credit
Agreement or with any
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domestic commercial bank having capital and surplus in excess of $500.0
million and a Thompson Bank Watch Rating of "B" or better, (iv) repurchase
obligations with a term of not more than seven days for underlying securities
of the types described in clauses (ii) and (iii) above entered into with any
financial institution meeting the qualifications specified in clause (iii)
above, (v) commercial paper having the highest rating obtainable from Moody's
Investors Service, Inc. or Standard & Poor's Ratings Group and (vi) money
market funds registered with the Commission and meeting the requirements of
Section 2(a)(7) of the Investment Company Act of 1940, as amended, and, in
each case, maturing within six months after the date of acquisition.
"Change of Control" means the occurrence of any of the following: (i) the
sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all
or substantially all of the assets of the Company and its Subsidiaries taken
as a whole to any "person" (as such term is used in Section 13(d)(3) of the
Exchange Act), other than the Principals or their Related Parties, (ii) the
adoption of a plan relating to the liquidation or dissolution of the Company,
(iii) the consummation of any transaction (including, without limitation, any
merger or consolidation) the result of which is that any "person" (as defined
above), other than the Principals and their Related Parties, becomes the
"beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under
the Exchange Act), directly or indirectly, of more than 35% of the voting
stock of Holdings or the Company, (iv) the consummation of any transaction
(including, without limitation, any merger or consolidation) the result of
which is that Holdings ceases to own 100% of the outstanding Equity Interests
of the Company or (v) the first day on which a majority of the members of the
Board of Directors of the Company are not Continuing Directors.
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus (i) an amount
equal to any extraordinary or non-recurring loss plus any net loss realized in
connection with an Asset Sale, the disposition of any securities by such
Person or any of its Subsidiaries or the extinguishment of any Indebtedness by
such Person or its Subsidiaries (to the extent such losses were deducted in
computing such Consolidated Net Income), plus (ii) provision for taxes based
on income or profits of such Person and its Subsidiaries for such period, to
the extent that such provision for taxes was included in computing such
Consolidated Net Income, plus (iii) consolidated interest expense of such
Person and its Subsidiaries for such period, whether paid or accrued and
whether or not capitalized (including, without limitation, amortization of
original issue discount, non-cash interest payments, the interest component of
any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, imputed interest with respect to
Attributable Debt, commissions, discounts and other fees and charges incurred
in respect of letter of credit or bankers' acceptance financings, and net
payments (if any) pursuant to Hedging Obligations), to the extent that any
such expense was deducted in computing such Consolidated Net Income, plus (iv)
depreciation, amortization (including amortization of goodwill and other
intangibles but excluding amortization of prepaid cash expenses that were paid
in a prior period) and other non-cash charges (excluding any such non-cash
charge to the extent that it represents an accrual of or reserve for cash
charges in any future period or amortization of a prepaid cash expense that
was paid in a prior period) of such Person and its Subsidiaries for such
period to the extent that such depreciation, amortization and other non-cash
charges were deducted in computing such Consolidated Net Income, minus (v)
non-cash items increasing consolidated revenues in determining such
Consolidated Net Income for such period, minus (vi) the amount of Earn-out
Obligations paid during such period (to the extent not already reflected as an
expense in Consolidated Net Income), in each case, on a consolidated basis and
determined in accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Subsidiaries for such
period, on a consolidated basis, determined in accordance with GAAP; provided
that (i) the Net Income (but not loss) of any Person that is not a Subsidiary
or that is accounted for by the equity method of accounting shall be included
only to the extent of the amount of dividends or distributions paid in cash to
the referent Person or a Wholly Owned Subsidiary thereof, (ii) the Net Income
of any Subsidiary shall be excluded to the extent that the declaration or
payment of dividends or similar distributions by that Subsidiary of that Net
Income is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or indirectly,
by operation of the terms of
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its charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to that Subsidiary or its
stockholders, (iii) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition
shall be excluded and (iv) the cumulative effect of a change in accounting
principles shall be excluded.
"Consolidated Net Worth" means, with respect to any Person as of any date,
the sum of (i) the consolidated equity of the common stockholders of such
Person and its consolidated Subsidiaries as of such date plus (ii) the
respective amounts reported on such Person's balance sheet as of such date
with respect to any series of preferred stock (other than Disqualified Stock)
that by its terms is not entitled to the payment of dividends unless such
dividends may be declared and paid only out of net earnings in respect of the
year of such declaration and payment, but only to the extent of any cash
received by such Person upon issuance of such preferred stock, less (x) all
write-ups (other than write-ups resulting from foreign currency translations
and write-ups of tangible assets of a going concern business made within 12
months after the acquisition of such business) subsequent to the date of the
Indenture in the book value of any asset owned by such Person or a
consolidated Subsidiary of such Person and (y) all unamortized debt discount
and expense and unamortized deferred charges as of such date, all of the
foregoing determined in accordance with GAAP.
"Continuing Directors" means, as of any date of determination, any member of
the Board of Directors of the Company who (i) was a member of such Board of
Directors on the date of the Indenture or (ii) was nominated for election or
elected to such Board of Directors with the approval, recommendation or
endorsement of a majority of the Continuing Directors who were members of such
Board at the time of such nomination or election.
"Credit Agreement" means that certain Second Amended and Restated Credit
Agreement, dated as of the date of the Indenture, by and among the Company,
the Guarantors, Bank of America NT&SA, as administrative agent, and the
lenders party thereto, including any related notes, Guarantees, collateral
documents, instruments and agreements executed in connection therewith, and in
each case as amended, modified, renewed, refunded, replaced or refinanced from
time to time.
"Default" means any event that is or with the passage of time or the giving
of notice or both would be an Event of Default.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
date that is 91 days after the date on which the Notes mature.
"Earn-out Obligations" means contingent payment obligations of the Company
or any of its Subsidiaries incurred in connection with the acquisition of
assets or businesses, which obligations are payable based on the performance
of the assets or businesses so acquired; provided that the amount of such
obligations shall not exceed 25% of the total consideration paid for such
assets or businesses; and provided, further, that the amount of such
obligations outstanding at any time shall be measured by the maximum amount
potentially payable thereunder without regard to performance criteria, the
passage of time or other conditions.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Existing Indebtedness" means (i) $5.1 million of Indebtedness incurred in
connection with the acquisition of Cash-N-Dash Check Cashing, Inc. and (ii) up
to $3.0 million in aggregate principal amount of Indebtedness of the Company
and its Subsidiaries (other than Indebtedness under the Credit Agreement or
any predecessor bank credit facility) in existence on the date of the
Indenture, in each case, until such amounts are repaid.
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"Fixed Charges" means, with respect to any Person for any period, the sum
of, without duplication, (i) the consolidated interest expense of such Person
and its Subsidiaries for such period, whether paid or accrued (including,
without limitation, amortization of original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease Obligations,
imputed interest with respect to Attributable Debt, commissions, discounts and
other fees and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net payments (if any) pursuant to Hedging
Obligations) and (ii) the consolidated interest expense of such Person and its
Subsidiaries that was capitalized during such period, and (iii) any interest
expense on Indebtedness of another Person that is Guaranteed by such Person or
one of its Subsidiaries or secured by a Lien on assets of such Person or one
of its Subsidiaries (whether or not such Guarantee or Lien is called upon) and
(iv) the product of (A) all cash dividend payments (and non-cash dividend
payments in the case of a Person that is a Subsidiary) on any series of
preferred stock of such Person, times (B) a fraction, the numerator of which
is one and the denominator of which is one minus the then current combined
federal, state and local statutory tax rate of such Person, expressed as a
decimal, in each case, on a consolidated basis and in accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person for such period
to the Fixed Charges of such Person for such period. In the event that the
Company or any of its Subsidiaries incurs, assumes, Guarantees or redeems any
Indebtedness (other than revolving credit borrowings) or issues preferred
stock subsequent to the commencement of the period for which the Fixed Charge
Coverage Ratio is being calculated but prior to the date on which the event
for which the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), the Fixed Charge Coverage Ratio shall be calculated
giving pro forma effect to such incurrence, assumption, Guarantee or
redemption of Indebtedness, or such issuance or redemption of preferred stock
(including the application of any proceeds therefrom), as if the same had
occurred at the beginning of the applicable four-quarter reference period. In
addition, for purposes of making the computation referred to above, (i)
acquisitions that have been made by the Company or any of its Subsidiaries,
including through mergers or consolidations and including any related
financing transactions, during the four-quarter reference period or subsequent
to such reference period and on or prior to the Calculation Date shall be
deemed to have occurred on the first day of the four-quarter reference period
and Consolidated Cash Flow for such reference period shall be calculated to
include the Consolidated Cash Flow of the acquired entities (adjusted to
exclude (x) the cost of any compensation, remuneration or other benefit paid
or provided to any employee, consultant, Affiliate or equity owner of the
acquired entities to the extent such costs are eliminated and not replaced and
(y) the amount of any reduction in general, administrative or overhead costs
of the acquired entities, in each case, as determined in good faith by an
officer of the Company) and without giving effect to clause (iii) of the
proviso set forth in the definition of Consolidated Net Income, and (ii) the
Consolidated Cash Flow attributable to discontinued operations, as determined
in accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded, and (iii) the Fixed Charges attributable
to discontinued operations, as determined in accordance with GAAP, and
operations or businesses disposed of prior to the Calculation Date, shall be
excluded, but only to the extent that the obligations giving rise to such
Fixed Charges will not be obligations of the referent Person or any of its
Subsidiaries following the Calculation Date.
"GAAP" means United States generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect on the date of the
Indenture.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Guarantors" means each of (i) Albuquerque Investments, Inc., Any Kind Check
Cashing Centers, Inc., Check Mart of Louisiana, Inc., Check Mart of New
Mexico, Inc., Check Mart of New Jersey, Inc., Check Mart
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of Pennsylvania, Inc., Check Mart of Texas, Inc., Check Mart of Utah, Inc.,
Check Mart of Washington, Inc., Check Mart of Washington, D.C., Inc., Check
Mart of Wisconsin, Inc., DFG Warehousing Co., Inc., Dollar Financial Insurance
Corp., Dollar Insurance Administration Corp., Financial Exchange Company of
Michigan, Inc., Financial Exchange Company of Ohio, Inc., Financial Exchange
Company of Pennsylvania, Inc., Financial Exchange Company of Pittsburgh, Inc.,
Financial Exchange Company of Virginia, Inc., L.M.S. Development Corporation,
Monetary Management Corp., Monetary Management Corporation of Pennsylvania,
Monetary Management of California, Inc., Monetary Management of Maryland,
Inc., Monetary Management of New York, Inc., Pacific Ring Enterprises, Inc.
and U.S. Check Exchange Limited Partnership, and (ii) any other domestic
Subsidiary of the Company that executes a Subsidiary Guarantee in accordance
with the provisions of the Indenture, and their respective successors and
assigns.
"Hedging Obligations" means, with respect to any Person, the obligations of
such Person under (i) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements and (ii) other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates.
"Holdings" means DFG Holdings, Inc., a Delaware corporation and the 100%
owner of the Company.
"Indebtedness" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, (i) in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or banker's
acceptances, (ii) representing Capital Lease Obligations, (iii) the balance
deferred and unpaid of the purchase price of any property, except any such
balance that constitutes an accrued expense or trade payable, or (iv)
representing any Hedging Obligations, if and to the extent any of the
foregoing indebtedness (other than letters of credit and Hedging Obligations)
would appear as a liability upon a balance sheet of such Person prepared in
accordance with GAAP, as well as all indebtedness of others secured by a Lien
on any asset of such Person (whether or not such indebtedness is assumed by
such Person) and, to the extent not otherwise included, the Guarantee by such
Person of any Indebtedness of any other Person.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the form of direct or
indirect loans (including Guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP;
provided that an acquisition of assets, Equity Interests or other securities
by the Company for consideration consisting of common equity securities of the
Company shall not be deemed to be an Investment. If the Company or any
Subsidiary of the Company sells or otherwise disposes of any Equity Interests
of any direct or indirect Subsidiary of the Company such that, after giving
effect to any such sale or disposition, such Person is no longer a Subsidiary
of the Company, the Company shall be deemed to have made an Investment on the
date of any such sale or disposition equal to the fair market value of the
Equity Interests of such Subsidiary not sold or disposed of.
"Lien" means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset, whether
or not filed, recorded or otherwise perfected under applicable law (including
any conditional sale or other title retention agreement, any lease in the
nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain (but
not loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (A) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions) or (B)
the disposition of any securities by such Person or any of its Subsidiaries or
the extinguishment of any Indebtedness of such Person or any of its
Subsidiaries and (ii) any extraordinary or
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nonrecurring gain (but not loss), together with any related provision for
taxes on such extraordinary or nonrecurring gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by the Company or
any of its Subsidiaries in respect of any Asset Sale (including, without
limitation, any cash received upon the sale or other disposition of any non-
cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale (including, without limitation, legal, accounting
and investment banking fees, and sales commissions) and any relocation
expenses incurred as a result thereof, taxes paid or payable as a result
thereof (after taking into account any available tax credits or deductions and
any tax sharing arrangements), amounts required to be applied to the repayment
of Indebtedness (other than revolving credit Indebtedness under the Credit
Agreement) secured by a Lien on the asset or assets that were the subject of
such Asset Sale and any reserve for adjustment in respect of the sale price of
such asset or assets established in accordance with GAAP.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Permitted Investments" means (a) any Investment in the Company or in a
Wholly Owned Subsidiary of the Company that is a Guarantor and that is engaged
in the same or a similar line of business as the Company and its Subsidiaries
were engaged in on the date of the Indenture; (b) any Investment in Cash
Equivalents or the Notes; (c) any Investment by the Company or any Subsidiary
of the Company in a Person, if as a result of such Investment (i) such Person
becomes a Wholly Owned Subsidiary of the Company and a Guarantor that is
engaged in the same or a similar line of business as the Company and its
Subsidiaries were engaged in on the date of the Indenture or (ii) such Person
is merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Company or a
Wholly Owned Subsidiary of the Company that is a Guarantor and that is engaged
in the same or a similar line of business as the Company and its Subsidiaries
were engaged in on the date of the Indenture; (d) any Restricted Investment
made as a result of the receipt of non-cash consideration from an Asset Sale
that was made pursuant to and in compliance with the covenant described above
under the caption "--Repurchase at the Option of Holders--Asset Sales";
(e) other Investments in any Person (other than Holdings or an Affiliate of
Holdings that is not also a Subsidiary of the Company) having an aggregate
fair market value (measured on the date each such Investment was made and
without giving effect to subsequent changes in value), when taken together
with all other Investments made pursuant to this clause (e) that are at the
time outstanding, not to exceed $3.0 million; and (f) any loan by the Company
to a Wholly Owned Subsidiary of the Company that is not a Guarantor and any
other Investment in a Wholly Owned Subsidiary of the Company that is not a
Guarantor to the extent necessary to preserve the full deductibility of
interest relating to Indebtedness of such Subsidiary.
"Permitted Liens" means (i) Liens securing Indebtedness under the Credit
Agreement that was permitted by the terms of the Indenture to be incurred;
(ii) Liens in favor of the Company; (iii) Liens on property of a Person
existing at the time such Person is merged into or consolidated with the
Company or any Subsidiary of the Company, provided that such Liens were in
existence prior to the contemplation of such merger or consolidation and do
not extend to any assets other than those of the Person merged into or
consolidated with the Company; (iv) Liens on property existing at the time of
acquisition thereof by the Company or any Subsidiary of the Company, provided
that such Liens were in existence prior to the contemplation of such
acquisition; (v) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a like
nature incurred in the ordinary course of business; (vi) Liens securing
Indebtedness (including Capital Lease Obligations) permitted by clause (iv) of
the second paragraph of the covenant entitled "--Incurrence of Indebtedness
and Issuance of Preferred Stock" covering only the assets acquired with such
Indebtedness; (vii) Liens existing on the date of the Indenture; (viii) Liens
for taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate
proceedings promptly instituted and diligently concluded, provided that any
reserve or other appropriate provision as shall be required in conformity with
GAAP shall have been made therefor; (ix) Liens incurred in the ordinary course
of business of the Company or any Subsidiary of the Company with respect to
obligations that do not exceed $5.0 million at any one time outstanding and
that (A) are not incurred in connection with the borrowing of money or
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the obtaining of advances or credit (other than trade credit in the ordinary
course of business) and (B) do not in the aggregate materially detract from
the value of the property or materially impair the use thereof in the
operation of business by the Company or such Subsidiary; and (x) Liens
securing Permitted Refinancing Debt, provided that the Company was permitted
to incur Liens with respect to the Indebtedness so refinanced.
"Permitted Refinancing Debt" means any Indebtedness of the Company or any of
its Subsidiaries issued in exchange for, or the net proceeds of which are used
to extend, refinance, renew, replace, defease or refund other Indebtedness of
the Company or any of its Subsidiaries; provided that (i) the principal amount
(or accreted value, if applicable) of such Permitted Refinancing Debt does not
exceed the principal amount plus accrued interest (or accreted value, if
applicable) of the Indebtedness so extended, refinanced, renewed, replaced,
defeased or refunded (plus the amount of reasonable expenses incurred in
connection therewith); (ii) such Permitted Refinancing Debt has a final
maturity date later than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; (iii) if the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded is subordinated in right of payment to
the Notes, such Permitted Refinancing Debt has a final maturity date later
than the final maturity date of, and is subordinated in right of payment to,
the Notes on terms at least as favorable to the holders of Notes as those
contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and (iv) such
Indebtedness is incurred either by the Company or by the Subsidiary who is the
obligor on the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded.
"Principals" means Weiss, Peck & Greer, General Electric Capital
Corporation, Pegasus Partners, L.P., or any person that is a general partner
of either Weiss, Peck & Greer or Pegasus Partners, L.P. as of the date of the
Indenture.
"Related Party" with respect to any Principal means any Subsidiary of such
Principal.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Act, as such Regulation is in effect on the date hereof.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total
voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
or trustees thereof is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of that
Person (or a combination thereof) and (ii) any partnership (A) the sole
general partner or the managing general partner of which is such Person or a
Subsidiary of such Person or (B) the only general partners of which are such
Person or of one or more Subsidiaries of such Person (or any combination
thereof).
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (A) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (B) the
number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (ii) the then outstanding
principal amount of such Indebtedness.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person
all of the outstanding Capital Stock or other ownership interests of which
(other than directors' qualifying shares) shall at the time be owned by such
Person or by one or more Wholly Owned Subsidiaries of such Person.
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DESCRIPTION OF CERTAIN OTHER INDEBTEDNESS
NEW REVOLVING CREDIT FACILITY
The Company, Bank of America NT&SA, Bank of America Illinois and Lehman
Commercial Paper, Inc. have entered into the New Revolving Credit Facility.
The New Revolving Credit Facility will mature on December 31, 2000 and
provides for an aggregate commitment of up to $25.0 million, subject to a
borrowing base limitation (the "Borrowing Base") based on the aggregate of
certain percentages of the cash and checks held by the Company's stores, or
for their account, and eligible government receivables. [With respect to the
Borrowing Base, upon the consummation of the Offering, the Company is able to
borrow up to approximately $25.0 million in the aggregate.]
Amounts outstanding under the New Revolving Credit Facility bear interest at
either (i) 0.50% plus the higher of (a) the federal funds rate plus 0.50% per
annum and (b) the rate publicly announced by Bank of America NT&SA, as its
"reference rate" or (ii) the Eurodollar Rate (as defined therein) plus 1.75%,
determined at the Company's option. Amounts outstanding under the New
Revolving Credit Facility are secured by a first priority lien on
substantially all properties and assets of the Company and its current and
future domestic subsidiaries (including all of the capital stock of the
Company's domestic subsidiaries and 65% of the capital stock of the Company's
Canadian subsidiaries). The Company's obligations under the New Revolving
Credit Facility are guaranteed by Holdings and each of the Company's direct
and indirect domestic subsidiaries.
The New Revolving Credit Facility contains covenants and provisions that
restrict, among other things, the Company's ability to: (i) merge or
consolidate with another entity, (ii) incur additional indebtedness, including
guarantees, (iii) incur liens on its property, (iv) engage in certain asset
sales or other dispositions, (v) pay dividends, make distributions or redeem,
prepay or repurchase the Notes and (vi) amend the Indenture or the
Registration Rights Agreement. The New Revolving Credit Facility also contains
covenants (i) requiring the Company to maintain net worth of not less than the
sum of (x) $33.0 million plus (y) 50% of its cumulative net income;
(ii) requiring the Company to maintain an interest coverage ratio on a rolling
four-quarter basis equal to not less than 1.50:1 in fiscal 1997, 1.75:1 in
fiscal 1998, and 2.00:1 in fiscal 1999 and 2000; (iii) requiring the Company
to maintain a ratio of total debt to cash flow of 5.25:1 in fiscal 1997,
4.50:1 in fiscal 1998 and 4.00:1 in fiscal 1999 and 2000; and (iv) limiting
the Company's capital expenditures to $3.5 million in fiscal 1997, $5.0
million in fiscal 1998, $3.25 million in fiscal 1999 and $2.0 million in
fiscal 2000. The Company is, subject to certain conditions, allowed to make
acquisitions with an aggregate purchase price of up to $17.0 million, which
acquisitions have to be completed by June 30, 1999, provided, however, that
acquisitions totalling no more than $15.0 million may be made in any
consecutive four quarters.
Events of default under the New Revolving Credit Facility include, among
other things: (i) any failure of the Company to pay principal, interest or
fees thereunder when due, (ii) default under other Indebtedness,
(iii) noncompliance with or breach of covenants contained in the New Revolving
Credit Facility and certain related documents, (iv) inaccuracy of any
representation or warranty when made by the Company in the New Revolving
Credit Facility and certain related documents, (v) certain events of
bankruptcy or insolvency, (vi) imposition of certain judgment or ERISA liens,
(vii) a Change of Control (as defined in the New Revolving Credit Facility)
and (viii) payment by the Company of more than $350,000 in liquidated damages
under the Registration Rights Agreement.
SELLER SUBORDINATED NOTES
In connection with the acquisitions of the 19 stores from ARI, Inc. in
February 1995 and the entities conducting business as Check Mart, Inc. in
September 1994, one of the Company's subsidiaries issued subordinated notes to
the sellers in the principal amounts of $2.7 million and $720,000,
respectively, of which $2.6 million and $240,000 respectively remained
outstanding at September 30, 1996. The subordinated notes bear interest at the
a reference rate plus 1% (9.25% at September 30, 1996). The notes are
subordinated to all present and future obligations of the Company. See
"Business--Legal Proceedings" for discussion of litigation concerning
subordinated seller note in connection with the acquisition of the stores from
ARI, Inc.
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<PAGE>
OTHER DEBT
In connection with the acquisition of the companies conducting business as
"Chex$Cashed", the Company issued notes for non-competition agreements with
the former shareholders of the companies. The notes have a term of four years,
ending on September 1, 1999, and bear interest at the prime rate, as defined,
plus 1%. As of September 30, 1996 the aggregate outstanding balance of these
notes was $57,000. The Company has also financed its insurance premiums, which
financing aggregates $129,000 at September 30, 1996.
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CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
The following general discussion summarizes certain of the material U.S.
federal income tax aspects of the acquisition, ownership and disposition of
the New Notes. This discussion is a summary for general information only and
does not consider all aspects of U.S. federal income tax that may be relevant
to the purchase, ownership and disposition of the New Notes by a prospective
investor in light of such investor's personal circumstances. This discussion
also does not address the U.S. federal income tax consequences of ownership of
New Notes not held as capital assets within the meaning of Section 1221 of the
U.S. Internal Revenue Code of 1986, as amended (the "Code"), or the U.S.
federal income tax consequences to investors subject to special treatment
under the U.S. federal income tax laws, such as dealers in securities or
foreign currency, tax-exempt entities, banks, thrifts, insurance companies,
persons that hold the New Notes as part of a "straddle", a "hedge" against
currency risk or a "conversion transaction", persons that have a "functional
currency" other than the U.S. dollar, and investors in pass-through entities.
In addition, this discussion is generally limited to the tax consequences to
initial holders. It does not describe any tax consequences arising out of the
tax laws of any state, local or foreign jurisdiction.
This discussion is based upon the Code, existing and proposed regulations
thereunder, and current administrative rulings and court decisions. All of the
foregoing is subject to change, possibly on a retroactive basis, and any such
change could affect the continuing validity of this discussion.
PROSPECTIVE HOLDERS OF THE NEW NOTES SHOULD CONSULT THEIR OWN TAX ADVISORS
CONCERNING THE APPLICATION OF U.S. FEDERAL INCOME TAX LAWS, AS WELL AS THE
LAWS OF ANY STATE, LOCAL OR FOREIGN TAXING JURISDICTION, TO THEIR PARTICULAR
SITUATIONS.
U.S. HOLDERS
The following discussion is limited to the U.S. federal income tax
consequences relevant to a holder of a New Note that is (i) a citizen or
resident (as defined in Section 7701(b) (1) of the Code) of the United States,
(ii) a corporation organized under the laws of the United States or any
political subdivision thereof or therein or (iii) an estate or trust, the
income of which is subject to U.S. federal income tax regardless of the source
(a "U.S. Holder"). Certain U.S. federal income tax consequences relevant to a
holder other than a U.S. Holder are discussed separately below.
EXCHANGE OFFER
The exchange of the Old Notes for New Notes pursuant to the Exchange Offer
should not be a taxable exchange for U.S. federal income tax purposes. As a
result, there should be no federal income tax consequences to U.S. Holders
exchanging the Old Notes for the New Notes pursuant to the Exchange Offer.
STATED INTEREST
Interest on a New Note will be taxable to a U.S. Holder as ordinary interest
income at the time it accrues or is received in accordance with such holder's
method of accounting for tax purposes.
MARKET DISCOUNT
If a New Note is acquired at a "market discount", some or all of any gain
realized upon a sale, other disposition or payment at maturity (or earlier),
or some or all of the proceeds of a partial principal payment, of such Note
may be treated as ordinary income, as described below. For this purpose,
"market discount" is the excess (if any) of the stated redemption price at
maturity over the purchase price, subject to a statutory de minimis exception.
Unless a U.S. Holder has elected to include the market discount in income as
it accrues, any gain realized on any subsequent disposition of such a Note
(other than in connection with certain nonrecognition transactions) or payment
at maturity (or earlier), or some or all of the proceeds of a partial
principal payment with respect to such Note, will be treated as ordinary
income to the extent of the market discount accrued during the period such
Note was held.
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<PAGE>
The amount of market discount treated as having accrued will be determined
either (i) on a ratable basis by multiplying the market discount times a
fraction, the numerator of which is the number of days the New Note was held
by the U.S. Holder and the denominator of which is the total number of days
after the date such U.S. Holder acquired the New Note up to and including the
date of its maturity or (ii) if the U.S. Holder so elects, on a constant
interest rate method. A U.S. Holder may make that election with respect to any
New Note but, once made, such election is irrevocable.
In lieu of recharacterizing gain upon disposition as ordinary income to the
extent of accrued market discount at the time of disposition, a U.S. Holder of
a New Note acquired at a market discount may elect to include market discount
in income currently, through the use of either the ratable inclusion method or
the elective constant interest method. Once made, the election to include
market discount in income currently applies to all Notes and other obligations
held by the U.S. Holder that are purchased at a market discount during the
taxable year for which the election is made, and all subsequent taxable years
of the U.S. Holder, unless the Internal Revenue Service (the "IRS") consents
to a revocation of the election. If an election is made to include market
discount in income currently, the basis of the New Note in the hands of the
U.S. Holder will be increased by the market discount thereon as it is included
in income.
Unless a U.S. Holder who acquires a New Note at a market discount elects to
include market discount in income currently, such U.S. Holder may be required
to defer deductions for any interest paid on indebtedness allocable to such
Notes in an amount not exceeding the deferred income until such income is
realized.
BOND PREMIUM
If a U.S. Holder purchases a New Note and immediately after the purchase the
adjusted basis of the New Note exceeds the sum of all amounts payable on the
instrument after the purchase date (other than qualified stated interest), the
New Note has "bond premium." A U.S. Holder may elect to amortize such bond
premium over the remaining term of such Note (or, in certain circumstances,
until an earlier call date).
If bond premium is amortized, the amount of interest that must be included
in the U.S. Holder's income for each period ending on an interest payment date
or at the stated maturity, as the case may be, will be reduced by the portion
of premium allocable to such period based on the New Note's yield to maturity.
If such an election to amortize bond premium is not made, a U.S. Holder must
include the full amount of each interest payment in income in accordance with
its regular method of accounting and will receive a tax benefit from the
premium only in computing such Holder's gain or loss upon the sale or other
disposition or payment of the principal amount of the New Note.
An election to amortize premium will apply to amortizable bond premium on
all Notes and other bonds, the interest on which is includible in the U.S.
Holder's gross income, held at the beginning of the U.S. Holder's first
taxable year to which the election applies or are thereafter acquired, and may
be revoked only with the consent of the IRS.
SALE, EXCHANGE OR REDEMPTION OF THE NOTES
Upon the disposition of a New Note by sale, exchange or redemption, a U.S.
Holder will generally recognize gain or loss equal to the difference between
(i) the amount realized on the disposition (other than amounts attributable to
accrued interest) and (ii) the U.S. Holder's tax basis in the New Note. A U.S.
Holder's tax basis in a New Note generally will equal the cost of the Note
(net of accrued interest) to the U.S. Holder increased by amounts includible
in income as market discount (if the holder elects to include market discount
on a current basis) and reduced by any amortized bond premium.
Provided the New Note is held as a capital asset, such gain or loss (except
as otherwise provided by the market discount rules otherwise provide) will
generally constitute capital gain or loss and will be long-term capital gain
or loss if the U.S. Holder has held such New Note for more than one year.
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<PAGE>
BACKUP WITHHOLDING AND INFORMATION REPORTING
Under the Code, a U.S. Holder of a New Note may be subject, under certain
circumstances, to information reporting and/or backup withholding at a 31%
rate with respect to cash payments in respect of interest or the gross
proceeds from dispositions thereof. This withholding applies only if the
holder (i) fails to furnish its social security or other taxpayer
identification number ("TIN") within a reasonable time after a request
therefor, (ii) furnishes an incorrect TIN, (iii) fails to report interest
properly, or (iv) fails, under certain circumstances, to provide a certified
statement, signed under penalty of perjury, that the TIN provided is its
correct number and that it is not subject to backup withholding. Any amount
withheld from a payment to a U.S. Holder under the backup withholding rules is
allowable as a credit (and may entitle such holder to a refund) against such
holder's U.S. federal income tax liability, provided that the required
information is furnished to the IRS. Certain persons are exempt from backup
withholding, including corporations and financial institutions. U.S. Holders
of New Notes should consult their tax advisors as to their qualification for
exemption from withholding and the procedure for obtaining such exemption.
NON-U.S. HOLDERS
The following discussion is limited to the U.S. federal income tax
consequences relevant to a holder of a New Note that is not (i) a citizen or
resident of the United States, (ii) a corporation organized under the laws of
the United States or any political subdivision thereof or therein or (iii) an
estate or trust, the income of which is subject to U.S. federal income tax
regardless of the source (a "Non-U.S. Holder").
This discussion does not deal with all aspects of U.S. federal income and
estate taxation that may be relevant to the purchase, ownership or disposition
of the New Notes by any particular Non-U.S. Holder in light of such Holder's
personal circumstances, including holding the New Notes through a partnership,
trust or estate. For example, persons who are partners in foreign partnerships
or beneficiaries of foreign trusts or estates who are subject to U.S. federal
income tax because of their own status, such as United States residents or
foreign persons engaged in a trade or business in the United States, may be
subject to U.S. federal income tax or income and gain from the New Notes, even
though the entity is not so subject.
For purposes of the following discussion, interest and gain on the sale,
exchange or other disposition of the New Note will be considered "U.S. trade
or business income" if such income or gain is (i) effectively connected with
the conduct of a U.S. trade or business or (ii) in the case of a treaty
resident, attributable to a U.S. permanent establishment (or to a fixed base)
in the United States.
STATED INTEREST
Generally, any interest paid to a Non-U.S. Holder of a New Note that is not
U.S. trade or business income will not be subject to United States tax if the
interest qualIfies as "portfolio interest." Generally, interest on the New
Notes will qualify as portfolio interest if (i) the Non-U.S. Holder does not
actually or constructively own 10% or more of the total voting power of all
voting stock of the Company and is not a "controlled foreign corporation" with
respect to which the Company is a "related person" within the meaning of the
Code, (ii) the Non-U.S. Holder is not a bank receiving such interest on an
extension of credit made pursuant to a loan agreement entered into in the
ordinary course of its trade or business and (iii) the beneficial owner, under
penalty of perjury, certifies that the beneficial owner is not a United States
person and such certificate provides the beneficial owner's name and address.
The gross amount of payments to a Non-U.S. Holder of interest that do not
qualify for the portfolio interest exception and that are not U.S. trade or
business income will be subject to U.S. federal income tax at the rate of 30%,
unless a U.S. income tax treaty applies to reduce or eliminate withholding.
U.S. trade or business income will be taxed at regular U.S. rates rather than
the 30% withholding rate. To claim the benefit of a tax treaty or to claim
exemption from withholding because the income is U.S. trade or business
income, the Non-U.S. Holder must provide a properly executed Form 1001 or 4224
(or such successor forms as the IRS designates), as applicable, prior to the
payment of interest. These forms must be periodically updated. Under proposed
regulations, the Forms 1001 and 4224 will be replaced by Form W-8. Also under
proposed regulations, a Non-U.S. Holder who is claiming the benefits of a
treaty may be required to obtain a U.S. taxpayer identification number and to
provide certain documentary evidence issued by foreign governmental
authorities to prove residence in the foreign country. Certain special
procedures are provided in the proposed regulations for payments through
qualified intermediaries.
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SALE, EXCHANGE OR REDEMPTION OF NOTES
Except as described below and subject to the discussion concerning backup
withholding, any gain realized by a Non-U.S. Holder on the sale, exchange or
redemption of a New Note generally will not be subject to U.S. federal income
tax, unless (i) such gain is U.S. trade or business income, (ii) subject to
certain exceptions, the Non-U.S. Holder is an individual who holds the New
Note as a capital asset and is present in the United States for 183 days or
more in the taxable year of the disposition, or (iii) the Non-U.S. Holder is
subject to tax pursuant to the provisions of U.S. tax law applicable to
certain U.S. expatriates.
FEDERAL ESTATE TAX
New Notes held (or treated as held) by an individual who is a Non-U.S.
Holder at the time of his or her death will not be subject to U.S. federal
estate tax provided that the individual does not actually or constructively
own 10% or more of the total voting power of all voting stock of the Company
and income on the Notes was not U.S. trade or business income.
INFORMATION REPORTING AND BACKUP WITHHOLDING
The Company must report annually to the IRS and to each Non-U.S. Holder any
interest that is subject to withholding or that is exempt from U.S.
withholding tax pursuant to a tax treaty or the portfolio interest exception.
Copies of these information returns may also be made available under the
provisions of a specific treaty or agreement to the tax authorities of the
country in which the Non-U.S. Holder resides (or is otherwise subject to tax).
The regulations provide that backup withholding and information reporting
will not apply to payments of principal on the New Notes by the Company to a
Non-U.S. Holder, if the Holder certifies as to its non-U.S. status under
penalties of perjury or otherwise establishes an exemption (provided that
neither the Company nor its paying agent has actual knowledge that the holder
is a United States person or that the conditions of any other exemption are
not, in fact, satisfied).
The payment of the proceeds from the disposition of New Notes to or through
the United States office of any broker, U.S. or foreign, will be subject to
information reporting and possible backup withholding unless the owner
certifies as its non-U.S. status under penalty of perjury or otherwise
establishes an exemption, provided that the broker does not have actual
knowledge that the Holder is a U.S. person or that the conditions of any other
exemption are not, in fact, satisfied. The payment of the proceeds from the
disposition of a New Note to or through a non-U.S. office of a non-U.S. broker
that is not a U.S. related person will not be subject to information reporting
or backup withholding. For this purpose, a "U.S. related person" is (i) a
"controlled foreign corporation" for U.S. federal income tax purposes or (ii)
a foreign person 50% or more of whose gross income from all sources for the
three-year period ending with the close of its taxable year preceding the
payment (or for such part of the period that the broker has been in existence)
is derived from activities that are effectively connected with the conduct of
a United States trade or business.
In the case of the payment of proceeds from the disposition of New Notes to
or through a non-U.S. office of a broker that is either a U.S. person or a
U.S. related person, the regulations require information reporting on the
payment unless the broker has documentary evidence in its files that the owner
is a Non-U.S. Holder and the broker has no knowledge to the contrary. Backup
withholding will not apply to payments made through foreign offices of a
broker that is a U.S. person or a U.S. related person (absent actual knowledge
that the payee is a U.S. person).
Any amounts withheld under the backup withholding rules from a payment to a
Non-U.S. Holder will be allowed as a refund or a credit against such Non-U.S.
Holder's U.S. federal income tax liability, provided that the requisite
procedures are followed.
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PLAN OF DISTRIBUTION
Each broker-dealer that receives New Notes for its own account pursuant to
the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes. This Prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of New Notes received in exchange for Old Notes where
such Old Notes were acquired as a result of market-making activities or other
trading activities. The Company has agreed that, for a period of 180 days
after the Expiration Date, it will make this prospectus, as amended or
supplemented, available to any broker-dealer for use in connection with any
such resale.
The Company will not receive any proceeds from any sale of New Notes by
broker-dealers. New Notes received by broker-dealers for their own account
pursuant to the Exchange Offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the New Notes or a combination of such
methods of resale, at market prices prevailing at the time of resale, at
prices related to such prevailing market prices or negotiated prices. Any such
resale may be made directly to purchasers or to or through brokers or dealers
who may receive compensation in the form of commissions or concessions from
any such broker-dealer or the purchasers of any such New Notes. Any broker-
dealer that resells New Notes that were received by it for its own account
pursuant to the Exchange Offer and any broker or dealer that participates in a
distribution of such New Notes may be deemed to be an "underwriter" within the
meaning of the Securities Act and any profit on any such resale of New Notes
and any commission or concessions received by any such persons may be deemed
to be underwriting compensation under the Securities Act. The Letter of
Transmittal states that, by acknowledging that it will deliver and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.
For a period of 180 days after the Expiration Date, the Company will
promptly send additional copies of this Prospectus and any amendment or
Supplement to this Prospectus to any broker-dealer that requests such
documents in the Letter of Transmittal. The Company has agreed, pursuant to
the Registration Rights Agreement, to pay all expenses incident to the
Exchange Offer (including the expenses of one counsel for all the holders of
the Notes as a single class) other than commissions or concessions of any
brokers or dealers and will indemnify the holders of the Notes (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
LEGAL MATTERS
The validity of the Notes offered hereby will be passed upon for the Company
and certain of the Guarantors by Weil, Gotshal & Manges LLP, New York, New
York.
EXPERTS
The consolidated financial statements of Dollar Financial Group, Inc., at
June 30, 1996 and 1995 and for each of the two years in the period then ended,
for the six months ended June 30, 1994 and for the year ended December 31,
1993, appearing in this Prospectus and Registration Statement, have been
audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon appearing elsewhere herein, and are included in reliance upon
such report given upon the authority of such firm as experts in accounting and
auditing.
The financial statements of Any Kind Check Cashing Centers, Inc. as of
December 31, 1995 and 1994 and for the three years then ended, appearing in
this Prospectus and elsewhere in the Registration Statement, have been audited
by McGladrey & Pullen, LLP, independent auditors, as stated in their report
appearing herein, and are included in reliance upon such reports given upon
the authority of such firm as experts in accounting and auditing.
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The combined statement of operations and of cash flows of L.M.S. Development
Corporation, Pacific Ring Enterprises, Inc. and NCCI Corporation, collectively
doing business as Chex$Cashed for the year ended December 31, 1994, appearing
in this Prospectus and Registration Statement, have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report thereon
appearing elsewhere herein, and are included in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
The financial statements of National Money Mart Inc. as of December 31, 1995
and for each of the two years then ended, appearing in this Prospectus and
elsewhere in the Registration Statement, have been audited by Ernst & Young,
Chartered Accountants, as set forth in their report appearing elsewhere
herein, and are included in reliance upon such report given upon the authority
of such firm as experts in accounting and auditing.
The financial statements of Cash-N-Dash Check Cashing, Inc. as of December
31, 1995 and 1994 and for the years then ended appearing in this Prospectus
and Registration Statement have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon appearing elsewhere herein, and
are included in reliance upon such report given upon the authority of such
firm as experts in accounting and auditing.
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INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
DOLLAR FINANCIAL GROUP, INC.
Consolidated balance sheets of Dollar Financial Group, Inc. as of
September 30, 1996 (unaudited), June 30, 1996 and 1995, and the related
consolidated statements of income, shareholder's equity, and cash flows
for the three months ended September 30, 1996 and 1995 (unaudited), for
the years ended June 30, 1996 and 1995 (collectively, the financial
statements of the "Successor" company), for the six-month transition
period ended June 30, 1994 and for the year ended December 31, 1993
(collectively, the financial statements of the "Predecessor" company)
with accompanying notes and Report of Independent Auditors thereon...... F-2
ANY KIND CHECK CASHING CENTERS, INC.
Consolidated balance sheets of Any Kind Check Cashing Centers, Inc. and
consolidated partnership as of June 30, 1996 (unaudited), December 31,
1995 and 1994, and the related consolidated statements of income,
retained earnings and minority interest in consolidated partnership, and
cash flows for the six months ending June 30, 1996 (unaudited) and for
each of the three years in the period ended December 31, 1995 with
accompanying notes and Independent Auditor's Report thereon............. F-21
L.M.S. DEVELOPMENT CORPORATION, PACIFIC RING ENTERPRISES, INC. AND NCCI
CORPORATION, COLLECTIVELY DOING BUSINESS AS CHEX$CASHED
Combined statements of income and of cash flows of L.M.S. Development
Corporation, Pacific Ring Enterprises, Inc. and NCCI Corporation,
collectively doing business as Chex$Cashed for the year ended December
31, 1994 with accompanying notes and Report of Independent Auditors
thereon................................................................. F-30
NATIONAL MONEY MART INC.
Consolidated balance sheets of National Money Mart Inc. as of September
30, 1996 (unaudited), December 31, 1995 and 1994 and the related
consolidated statements of income and retained earnings and cash flows
for the nine months ended September 30, 1996 and 1995 (unaudited) and
for each of the two years in the period ended December 31, 1995 with
accompanying notes and the Auditor's Report thereon..................... F-36
CASH-N-DASH CHECK CASHING, INC.
Balance sheets of Cash-N-Dash Check Cashing, Inc. as of September 30 1996
(unaudited), December 31, 1995 and 1994 and the related statements of
income, shareholders' equity and cash flows for the nine months ended
September 30, 1996 and 1995 (unaudited) and for each of the two years in
the period ended December 31, 1995 with accompanying notes and Report of
Independent Auditors thereon............................................ F-43
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and
Shareholders
DFG Holdings, Inc.
We have audited the accompanying consolidated balance sheets of Dollar
Financial Group, Inc. as of June 30, 1996 and 1995, and the related
consolidated statements of income, shareholder's equity, and cash flows for
each of the two years in the period ended June 30, 1996 and for the six months
ended June 30, 1994 and for the year ended December 31, 1993. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Dollar
Financial Group, Inc. at June 30, 1996 and 1995, and the consolidated results
of its operations and its cash flows for each of the two years in the period
ended June 30, 1996 and for the six months ended June 30, 1994 and for the
year ended December 31, 1993, in conformity with generally accepted accounting
principles.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
August 8, 1996, except for the
second paragraph of Note 14, as to
which the date is August 28, 1996
F-2
<PAGE>
DOLLAR FINANCIAL GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
JUNE 30,
--------------- SEPTEMBER 30,
1995 1996 1996
------- ------- -------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents....................... $19,778 $22,545 $ 41,784
Accounts receivable............................. 3,745 4,441 5,098
Prepaid expenses................................ 1,468 1,790 1,991
Deferred income taxes........................... 70 1,861 1,608
Note receivable--officer........................ 200 200 200
Properties and equipment, net of accumulated
depreciation of $1,061, $1,926 and $2,240...... 3,903 3,345 4,710
Cost assigned to contracts acquired, net of
accumulated amortization of $360, $660 and
$730........................................... 440 140 70
Cost in excess of net assets acquired, less
accumulated amortization of $880, $1,964 and
$2,409......................................... 29,996 31,989 68,263
Debt issuance costs, less accumulated
amortization of $223, $394 and $478............ 687 717 3,094
Other........................................... 400 416 572
------- ------- --------
$60,687 $67,444 $127,390
======= ======= ========
LIABILITIES AND SHAREHOLDER'S EQUITY
Accounts payable................................ $ 5,761 $ 6,844 $ 10,644
Accrued expenses................................ 3,655 4,363 4,912
Revolving credit facility....................... 6,208 7,738 6,077
Long-term debt and subordinated notes payable... 29,288 34,792 68,346
Shareholder's equity:
Common stock, $1 par value: 20,000 shares
authorized; 100 shares issued and outstanding
at June 30, 1995 and 1996, and at September
30, 1996..................................... -- -- --
Additional paid-in capital.................... 15,215 15,215 38,867
Retained earnings (accumulated deficit)....... 560 (1,508) (1,456)
------- ------- --------
Total shareholder's equity...................... 15,775 13,707 37,411
------- ------- --------
$60,687 $67,444 $127,390
======= ======= ========
</TABLE>
See accompanying notes.
F-3
<PAGE>
DOLLAR FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED SIX MONTHS YEAR ENDED JUNE 30, SEPTEMBER 30,
DECEMBER 31, ENDED ------------------- -------------------
1993 JUNE 30, 1994 1995 1996 1995 1996
------------ ------------- --------- --------- --------- ---------
(UNAUDITED)
PREDECESSOR PREDECESSOR SUCCESSOR SUCCESSOR SUCCESSOR SUCCESSOR
<S> <C> <C> <C> <C> <C> <C>
Revenues................ $28,734 $14,676 $34,834 $42,430 $9,741 $13,645
Store and regional
expenses:
Salaries and
benefits............. 8,354 4,266 11,042 13,975 3,245 4,691
Occupancy............. 2,578 1,313 3,122 4,031 953 1,395
Depreciation.......... 1,102 483 894 893 246 243
Other................. 8,139 4,132 9,577 11,709 2,772 3,648
------- ------- ------- ------- ------ -------
Total store and regional
expenses............... 20,173 10,194 24,635 30,608 7,216 9,977
Corporate expenses...... 4,414 2,321 4,414 5,360 1,309 1,371
Loss (gain) on store
closings and sales..... 110 36 93 4,501 21 (18)
Other depreciation and
amortization........... 1,183 319 1,630 1,858 422 659
Interest expense........ 1,597 721 2,480 3,385 759 1,358
------- ------- ------- ------- ------ -------
Income (loss) before
taxes.................. 1,257 1,085 1,582 (3,282) 14 298
Income tax provision
(benefit) ............. 205 174 1,022 (1,214) 71 246
------- ------- ------- ------- ------ -------
Net income (loss)... $ 1,052 $ 911 $ 560 $(2,068) $ (57) $ 52
======= ======= ======= ======= ====== =======
</TABLE>
See accompanying notes.
F-4
<PAGE>
DOLLAR FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
RETAINED
COMMON STOCK ADDITIONAL EARNINGS TOTAL
------------- PAID-IN (ACCUMULATED NOTES UNEARNED SHAREHOLDER'S
SHARES AMOUNT CAPITAL DEFICIT) RECEIVABLE COMPENSATION EQUITY
------ ------ ---------- ------------ ---------- ------------ -------------
PREDECESSOR COMPANY
-------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31,
1992................... 100 -- $12,399 $(6,050) $(313) $ (62) $ 5,974
Earned compensation.... 62 62
Dividends paid to
parent................ (1,500) (1,500)
Payment of notes
receivable............ 120 120
Net income for the year
ended December 31,
1993.................. 1,052 1,052
--- --- ------- ------- ----- ----- -------
Balance, December 31,
1993................... 100 -- 12,399 (6,498) (193) -- 5,708
Dividends paid to
parent................ (310) (310)
Net income for the six
months ended June 30,
1994.................. 911 911
--- --- ------- ------- ----- ----- -------
Balance, June 30, 1994.. 100 -- $12,399 $(5,897) $(193) $ -- $ 6,309
=== === ======= ======= ===== ===== =======
<CAPTION>
SUCCESSOR COMPANY
-----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, June 30, 1994.. 100 -- $15,160 $ -- $ -- $ -- $15,160
Capital contribution
from parent........... 55 55
Net income for the year
ended
June 30, 1995......... 560 560
--- --- ------- ------- ----- ----- -------
Balance, June 30, 1995.. 100 -- 15,215 560 -- -- 15,775
Net loss for the year
ended
June 30, 1996......... (2,068) (2,068)
--- --- ------- ------- ----- ----- -------
Balance, June 30, 1996.. 100 -- 15,215 (1,508) -- -- 13,707
Capital contribution
from parent, net of
issuance costs
(unaudited)........... 23,652 23,652
Net income for the
three months ended
September 30, 1996
(unaudited)........... 52 52
--- --- ------- ------- ----- ----- -------
Balance, September 30,
1996 (unaudited)....... 100 -- $38,867 $(1,456) $ -- $ -- $37,411
=== === ======= ======= ===== ===== =======
</TABLE>
See accompanying notes.
F-5
<PAGE>
DOLLAR FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS
YEAR SIX MONTHS YEAR ENDED ENDED
ENDED ENDED JUNE 30, SEPTEMBER 30,
DECEMBER 31, JUNE 30, ----------------- ----------------
1993 1994 1995 1996 1995 1996
------------ ---------- ------- -------- ------- -------
(UNAUDITED)
PREDECESSOR SUCCESSOR SUCCESSOR
<S> <C> <C> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net income (loss)....... $ 1,052 $ 911 $ 560 $ (2,068) $ (57) $ 52
Adjustments to reconcile
net income (loss) to
net cash provided by
operating activities:
Depreciation and
amortization......... 2,677 926 2,524 2,751 668 988
Losses (gains) on
store closings and
sales................ 110 36 93 4,501 21 (18)
Deferred tax provision
(benefit)............ -- -- 406 (1,282) 180 253
Change in assets and
liabilities (net of
effect of
acquisitions):
(Increase) decrease
in accounts
receivable......... (1,681) 800 960 (696) 326 (352)
(Increase) decrease
in prepaid expenses
and other assets... (130) 117 (753) (661) (101) 321
Increase (decrease)
in accounts payable
and accrued
expenses........... 589 (1,178) 560 1,124 1,843 2,746
------- ------- ------- -------- ------- -------
Net cash provided by
operating activities... 2,617 1,612 4,350 3,669 2,880 3,990
CASH FLOWS FROM
INVESTING ACTIVITIES:
Acquisitions, net of
cash acquired.......... (264) -- (8,147) (7,269) (6,619) (35,394)
Deferred startup costs.. (49) -- -- -- -- --
Additions to properties
and equipment.......... (309) (756) (1,468) (877) (212) (229)
------- ------- ------- -------- ------- -------
Net cash used in
investing activities... (622) (756) (9,615) (8,146) (6,831) (35,623)
CASH FLOWS FROM
FINANCING ACTIVITIES:
Payments on long-term
debt................... (1,000) (701) (919) (3,336) (718) (1,510)
Payments on subordinated
notes payable.......... (20) (106) (153) (342) (128) (102)
Net increase (decrease)
in revolving credit
facility............... -- -- 2,208 1,530 1,682 (1,661)
Dividends paid to
parent................. (628) -- -- -- -- --
Proceeds from long-term
debt................... 247 -- 9,940 9,182 9,102 35,000
Payments of debt
issuance costs......... -- -- -- -- (200) (2,507)
Proceeds from equity
contribution from
parent................. -- -- 5 210 50 21,652
------- ------- ------- -------- ------- -------
Net cash (used in)
provided by financing
activities............. (1,401) (807) 11,081 7,244 9,788 50,872
------- ------- ------- -------- ------- -------
Net increase in cash and
cash equivalents....... 594 49 5,816 2,767 5,837 19,239
Cash and cash
equivalents at
beginning of period.... 10,380 10,974 13,962 19,778 19,778 22,545
------- ------- ------- -------- ------- -------
Cash and cash
equivalents at end of
period................. $10,974 $11,023 $19,778 $ 22,545 $25,615 $41,784
======= ======= ======= ======== ======= =======
SUPPLEMENTAL SCHEDULE OF
NONCASH INVESTING AND
FINANCING ACTIVITIES:
Subordinated notes
payable issued in
connection with
acquisitions........... $ -- $ -- $ 3,420 $ -- $ 80 $ --
Capital contribution
from parent in
connection with
acquisition of Any Kind
Check Cashing Centers,
Inc.................... $ -- $ -- $ -- $ -- $ -- $ 2,000
Financing provided for
insurance premiums..... $ -- $ -- $ -- $ -- $ -- $ 166
</TABLE>
See accompanying notes.
F-6
<PAGE>
DOLLAR FINANCIAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED WITH RESPECT TO SEPTEMBER 30, 1995 AND 1996)
JUNE 30, 1996
1. ORGANIZATION AND BUSINESS
The accompanying consolidated financial statements are those of Dollar
Financial Group, Inc. (the "Company," formerly known as Monetary Management
Corporation), and its wholly-owned subsidiaries. The Company is a wholly-owned
subsidiary of DFG Holdings, Inc. ("Holdings," formerly known as Monetary
Management Holdings, Inc.). Holdings is a holding company whose only asset is
its investment in the Company. Holdings has no employees or operating
activities.
On June 30, 1994 MMH Transit Co. ("MMHT"), a Delaware corporation, was formed
principally by two private equity funds sponsored by Weiss, Peck and Greer,
through the issuance of 15,000 shares of common stock at $1,010.67 per share.
Total consideration was $15,160,000. Pursuant to an Agreement and Plan of
Merger dated as of June 30, 1994 among MMHT, Bear Stearns Acquisition XII, Inc.
(the predecessor majority shareholder of Holdings), and Holdings, Holdings and
MMHT consummated a merger whereby MMHT acquired all of the outstanding common
stock and warrants of Holdings for $10,500,000. MMHT was merged with and into
Holdings, and the separate corporate existence of MMHT ceased and Holdings is
the surviving corporation in the merger. References to the Successor refer to
the Company for the periods subsequent to the acquisition on June 30, 1994 and
references to the Predecessor refer to the Company for periods prior to the
acquisition on June 30, 1994.
The acquisition of Holdings on June 30, 1994 was accounted for under the
purchase method of accounting and, accordingly, the acquisition cost was
allocated to the fair value of net assets acquired. The cost of acquiring
Holdings was, in turn, allocated to the Company and used to establish a new
accounting basis in the Company's financial statements.
Below is a condensed balance sheet of the Company on June 30, 1994 after
giving effect to the purchase method of accounting and after giving effect to
an additional $4.6 million capital contribution from Holdings on June 30, 1994
and the refinancing of the Predecessor's existing indebtedness which occurred
on June 30, 1994 (in thousands).
<TABLE>
<S> <C>
ASSETS
Cash........................ $13,962
Accounts receivable......... 4,705
Prepaid expenses and other
assets..................... 654
Properties and equipment.... 2,891
Goodwill.................... 20,897
Cost of contracts acquired.. 800
Debt issuance costs......... 873
-------
TOTAL ASSETS................ $44,782
=======
</TABLE>
<TABLE>
<S> <C>
LIABILITIES
Accounts payable and accrued
expenses..................... $ 8,622
Debt.......................... 21,000
-------
29,622
Shareholder's equity.......... 15,160
-------
TOTAL LIABILITIES AND
SHAREHOLDER'S EQUITY....... $44,782
=======
</TABLE>
The Company, through its subsidiaries, provides retail financial and
government contractual services to the general public through a network of
approximately 155 locations operating as Check Mart(R), Chex$Cashed,
QwiCash(R), Almost-A-Banc, and Financial Exchange Company(R) in twelve states.
The services provided at the Company's retail locations include check cashing,
sale of money orders, money transfer services, issuance of food stamps and
other welfare benefits, and various other related services. Additionally, the
Company, through its merchant services division, maintains and services the
network of electronic government benefits distribution to several hundred
merchants throughout the State of New York.
F-7
<PAGE>
DOLLAR FINANCIAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(UNAUDITED WITH RESPECT TO SEPTEMBER 30, 1995 AND 1996)
2. SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the consolidated financial
statements and accompanying notes. Actual results could differ from those
estimates.
Principles of Consolidation
The accompanying financial statements include the accounts of the Company
and its wholly owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated in consolidation.
Fiscal Year
Prior to the acquisition discussed in Note 1, the Company maintained a
December 31 fiscal year. Effective with the acquisition, the Company changed
its fiscal year to June 30.
Property and Equipment
Office properties and equipment are carried at cost. Depreciation is
computed using the straight-line method over the estimated useful lives of the
assets, which vary from five to fifteen years.
Intangible Assets
The cost in excess of net assets acquired or goodwill was amortized using
the straight-line method over a useful life of forty years by the Predecessor
and is being amortized over thirty years by the Successor. The carrying value
of goodwill is reviewed annually to determine whether the facts and
circumstances suggest that the value may be impaired. If this review indicates
that the value will not be recoverable, as determined based on undiscounted
cash flows from operations before interest, the carrying value will be reduced
to an amount determined on the basis of such undiscounted cash flows. The cost
assigned to acquired contracts with various governmental agencies is being
amortized over the remaining contractual lives of the contracts which expire
on various dates through December 31, 1996.
Debt Issuance Costs
Debt issuance costs incurred are amortized over the five-year remaining term
of the related debt.
Store and Regional Expenses
The direct costs incurred in operating the Company's stores and providing
services under the Company's merchant services contracts have been classified
as store expenses. Store expenses include salaries and benefits of store and
regional employees, rent and other occupancy costs, depreciation of properties
and equipment, bank charges, armored security costs, net returned checks, cash
and food stamp shortages and other costs incurred by the stores. Excluded from
store operations are the corporate expenses of the Company which include
salaries and benefits of corporate employees, professional fees, and travel
costs.
Income Taxes
The Company uses the liability method to account for income taxes.
Accordingly, deferred income taxes have been determined by applying current
tax rates to temporary differences between the amount of assets and
liabilities determined for income tax and financial reporting purposes.
The Company and its subsidiaries file a consolidated federal income tax
return with Holdings.
F-8
<PAGE>
DOLLAR FINANCIAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(UNAUDITED WITH RESPECT TO SEPTEMBER 30, 1995 AND 1996)
Employees' Retirement Plan
Retirement benefits are provided to substantially all full-time employees
who have completed 1,000 hours of service through a defined contribution
retirement plan. The Company will match 50% of each employee's contribution,
up to 4% of the employee's annual salary. In addition, a discretionary
contribution may be made if the Company meets its financial objectives. The
amount of contributions charged to expense was $88,000 for the year ended
December 31, 1993, $47,000 for the six months ended June 30, 1994, $96,000 and
$129,000 for the years ended June 30, 1995 and 1996, respectively, and $32,000
and $42,000 for the three months ended September 30, 1995 and 1996,
respectively.
Advertising Costs
The Company expenses advertising costs as incurred. Advertising costs
charged to expense were $437,000 for the year ended December 31, 1993,
$172,000 for the six months ended June 30, 1994, $589,000 and $705,000 for the
years ended June 30, 1995 and 1996, respectively, and $145,000 and $189,000
for the three months ended September 30, 1995 and 1996, respectively.
Accounting for Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed of
In March 1995, the Financial Accounting Standards Board issued SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to Be Disposed of," which requires impairment losses to be recorded on long-
lived assets used in operations when indicators of impairment are present and
the undiscounted cash flows estimated to be generated by those assets are less
than the assets' carrying amount. SFAS No. 121 also addresses the accounting
for long- lived assets that are expected to be disposed of. The Company will
adopt SFAS No. 121 in 1997 and, based on current circumstances, does not
believe the effect of adoption will be material.
Fair Value of Financial Instruments
The carrying value of cash approximates its fair value because of its short-
term maturities. The carrying values of long-term debt, subordinated notes
payable and the revolving credit facility approximate their fair values, as
all debt obligations carry a variable interest rate.
Unaudited Interim Financial Statements
The Company, in its opinion, has included all adjustments (consisting only
of normal recurring accruals) necessary for a fair presentation of its
financial position at September 30, 1996 and the results of its operations for
the three months ended September 30, 1995 and 1996. The results for the three
months ended September 30, 1996 are not necessarily indicative of the results
for the full year.
3. DFG HOLDINGS, INC.
As discussed in Note 1, the Company is a wholly-owned subsidiary of DFG
Holdings, Inc. ("Holdings"). The activities of Holdings consist solely of its
investment in the Company, and there are no differences between the
consolidated results of operations of Holdings and those of the Company.
F-9
<PAGE>
DOLLAR FINANCIAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(UNAUDITED WITH RESPECT TO SEPTEMBER 30, 1995 AND 1996)
The consolidated financial position of Holdings was comprised of the
following (in thousands):
<TABLE>
<CAPTION>
JUNE 30,
--------------- SEPTEMBER 30,
1995 1996 1996
------- ------- -------------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents.................... $19,778 $22,545 $ 41,784
Accounts receivable.......................... 3,745 4,441 5,098
Prepaid expenses............................. 1,468 1,790 1,991
Deferred income taxes........................ 70 1,861 1,608
Note receivable--officer..................... 200 200 200
Properties and equipment, net of accumulated
depreciation of $1,061, $1,926 and $2,240... 3,903 3,345 4,710
Cost assigned to contracts acquired, net of
accumulated amortization of $360, $660 and
$730........................................ 440 140 70
Cost in excess of net assets acquired, less
accumulated amortization of $880, $1,964 and
$2,409...................................... 29,996 31,989 68,263
Debt issuance costs, less accumulated
amortization of $223, $394 and $478......... 687 717 3,094
Other........................................ 400 416 572
------- ------- --------
$60,687 $67,444 $127,390
======= ======= ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable............................. $ 5,761 $ 6,844 $ 10,644
Accrued expenses............................. 3,655 4,363 4,912
Revolving credit facility.................... 6,208 7,738 6,077
Long-term debt and subordinated notes
payable..................................... 29,288 34,792 68,346
SHAREHOLDERS' EQUITY:
Common stock, $.001 par value: 20,000 shares
authorized at June 30, 1995 and 1996 and
50,000 shares authorized at September 30,
1996; 15,054 shares issued and outstanding
at June 30, 1995 and 1996 and 30,054 shares
issued and outstanding at September 30,
1996........................................ -- -- --
Additional paid-in capital................... 15,215 15,215 38,867
Retained earnings (accumulated deficit)...... 560 (1,508) (1,456)
------- ------- --------
Total shareholders' equity................... 15,775 13,707 37,411
------- ------- --------
$60,687 $67,444 $127,390
======= ======= ========
</TABLE>
The components of Holdings' shareholders' equity are as follows:
Common Stock
As part of the Agreement and Plan of Merger dated June 30, 1994 discussed in
Note 1, Holdings issued 15,000 shares for $1,010.67 per share. Of the 20,000
shares authorized, 15,054 shares were issued and outstanding at June 30, 1996
and 1995.
Dividends
Under the terms of the Company's Credit Agreement discussed in note 6, the
Company is not permitted to declare, pay, or make any cash dividends to
Holdings.
F-10
<PAGE>
DOLLAR FINANCIAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(UNAUDITED WITH RESPECT TO SEPTEMBER 30, 1995 AND 1996
Stock Options
Holdings has granted nonqualified common stock options (the "options") to
certain executives to acquire up to 3,500 shares of common stock at a price of
$1,000 per share. The options have a term of ten years from the date of
issuance (June 30, 1994), and vest in equal monthly increments over three
years. All options become immediately vested upon the employee's termination
without cause, change of control of Holdings, sale of equity securities in a
public offering, or death or disability of the executive. The options will
terminate if the employee terminates unless the options are exercised within
60 days following the date on which termination occurs. All shares issuable
upon the exercise of the options are subject to the shareholders agreement
discussed below.
In addition to the options noted above, these executives have been granted
additional options (the "additional options") to acquire up to 1,500 shares of
the common stock of Holdings. The initial exercise price of these additional
options was $1,000 per share, with the exercise price increasing by 40% over
the exercise price for the prior year applicable on each anniversary date.
From and after the fifth anniversary date (June 30, 1999), the exercise price
will be $5,000 per share. These additional options have a term of ten years
provided that Holdings does not have a change of control or an initial public
offering of its common stock. The additional options have vested immediately
and are exercisable only in the event of a change in control or an initial
public offering of its shares of common stock. The shares subject to the
additional options are not subject to the shareholders agreement described
below. A shareholders agreement exists which provides for the mandatory
repurchase at fair value of all shares owned by certain members of executive
management in the event of death or termination of the executive.
Subsequent Events
As discussed in Note 14, subsequent to June 30, 1996, Holdings increased its
authorized shares and issued additional shares of its common stock in order to
partially finance two acquisitions. Additionally, Holdings increased the
number of shares under option and issued warrants to purchase shares of common
stock.
4. ACQUISITIONS
During 1995 and 1996, the Company acquired the entities described below,
which were accounted for by the purchase method of accounting. The results of
operations of the acquired companies are included in the Company's statement
of earnings for the periods in which they were owned by the Company. The total
purchase price for each acquisition has been allocated to assets acquired and
liabilities assumed based on estimated fair values.
In September 1994, the Company purchased substantially all of the assets of
the check cashing operations conducted under the name "Check Mart, Inc." at 24
locations in Washington, Utah, California, and New Mexico. Total consideration
for the purchase was $7,798,000. The acquisition was funded by a $720,000
subordinated note payable to the seller and proceeds from the Company's
acquisition loan facility. The excess of purchase price over the fair value of
identifiable net assets acquired was $6,700,000.
In February 1995, the Company purchased substantially all of the assets
associated with the check cashing and related business operations of 19
locations within Philadelphia, Pennsylvania from ARI, Inc. Total consideration
for this purchase was $4,289,000 and was funded by a $2,700,000 subordinated
note payable to the seller and proceeds from the Company's acquisition loan
facility. The excess of the purchase price over the fair value of identifiable
net assets acquired was $3,400,000. (See Note 13 related to the subsequent
closing of these stores.)
F-11
<PAGE>
DOLLAR FINANCIAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(UNAUDITED WITH RESPECT TO SEPTEMBER 30, 1995 AND 1996
In June 1995, the Company acquired the assets of two stores in California
operating as Pacific Check Exchange, Inc. for total consideration of $398,000,
funded from the Company's acquisition loan facility. The excess of the
purchase price over the fair value of identifiable net assets acquired was
$200,000.
In September 1995, the Company purchased all of the outstanding stock and
certain assets of several entities which operate 19 check cashing retail sites
located in California, Arizona, Ohio, and Wisconsin and operate under the name
"Chex$Cashed." Total consideration for this purchase was $7,356,000 and was
funded from the Company's acquisition loan facility. The excess of the
purchase price over the fair value of identifiable net assets acquired was
$6,660,000.
In May 1996, the Company acquired the assets of eleven check cashing kiosk
operations in Texas. The purchase price of approximately $456,000 was
allocated to the fair value of identifiable net assets acquired.
The following unaudited pro forma information presents the results of
operations as if the acquisitions of "Check Mart, Inc." and "Chex$Cashed" had
occurred on July 1, 1994. The pro forma operating results include the results
of operations for these acquisitions for the indicated periods and reflect the
amortization of intangible assets arising from the acquisitions and increased
interest expense on acquisition debt. Pro forma results of operations are not
necessarily indicative of the results of operations that would have occurred
had the purchase been made on the date above or the results which may occur in
the future.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED JUNE 30, SEPTEMBER 30,
(UNAUDITED) (UNAUDITED)
------------------- -------------------
1995 1996 1995
--------- --------- -------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Total revenues............ $ 42,264 $ 43,699 $11,014
Net income (loss)......... $ 906 $ (2,185) $ (162)
</TABLE>
The pro forma results of operations for the year ended June 30, 1996 and the
three months ended September 30, 1995 include bonus payments of $125,000 to
the former owners of Chex$Cashed in conjunction with and immediately preceding
the acquisition. The pro forma results of operations do not give effect to the
19 stores in Philadelphia acquired in February 1995, since these stores have
since been sold or closed. Additionally, the pro forma results of operations
do not give effect to the Pacific Check Exchange acquisition or the
acquisition of the check cashing kiosks in Texas since the pro forma results
would not be materially different.
5. PROPERTIES AND EQUIPMENT
Properties and equipment at June 30, 1995 and 1996 and at September 30, 1996
consist of (in thousands):
<TABLE>
<CAPTION>
JUNE 30,
------------- SEPTEMBER 30,
1995 1996 1996
------ ------ -------------
<S> <C> <C> <C>
Land........................................... $ 55 $ 55 $ 55
Buildings...................................... 111 111 111
Leasehold improvements......................... 2,202 2,136 2,940
Equipment and furniture........................ 2,596 2,969 3,844
------ ------ ------
4,964 5,271 6,950
Less accumulated depreciation.................. 1,061 1,926 2,240
------ ------ ------
Total properties and equipment............... $3,903 $3,345 $4,710
====== ====== ======
</TABLE>
F-12
<PAGE>
DOLLAR FINANCIAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(UNAUDITED WITH RESPECT TO SEPTEMBER 30, 1995 AND 1996)
6. REVOLVING CREDIT, LONG-TERM DEBT, AND SUBORDINATED NOTES PAYABLE
The Company has debt obligations at June 30, 1995 and 1996 and at September
30, 1996 as follows (in thousands):
<TABLE>
<CAPTION>
JUNE 30, SEPTEMBER 30,
--------------- -------------
1995 1996 1996
------- ------- -------------
<S> <C> <C> <C>
Revolving credit facility; interest at prime,
as defined, plus 1.25% at June 30, 1995 and
1996, amended to prime, as defined, plus
2.0% at September 30, 1996 (10.25%, 9.50%
and 10.25% at June 30, 1995 and 1996 and at
September 30, 1996, respectively) of the
outstanding daily balances payable
quarterly; principal due in full on June 30,
2000; weighted average interest rate of
9.74%, 9.83% and 9.73% for the years ended
June 30, 1995 and 1996 and for the three
months ended September 30, 1996,
respectively................................ $ 6,208 $ 7,738 $ 6,077
Term loan payable to bank; interest based on
Eurodollar rate, as defined, plus 2.50%,
(8.57% and 7.97% at June 30, 1995 and 1996,
respectively); interest payable at
conversion date, but at least quarterly;
weighted average interest rate of 8.36% and
8.35%, for the years ended June 30, 1995 and
1996, respectively.......................... 16,081 14,226 --
Acquisition loan facility payable to bank;
interest payable at conversion date, but at
least quarterly based on the Eurodollar
Rate, as defined, plus 2.50% (8.56% and
7.97% at June 30, 1995 and 1996,
respectively); weighted average interest
rate of 8.49% and 8.09%, for the years ended
June 30, 1995 and 1996, respectively........ 9,940 17,561 --
Tranche A term loan payable to bank; interest
based on Eurodollar rate as defined, plus
3.25% (8.69% at September 30, 1996);
interest payable at conversion date, but at
least quarterly; weighted average interest
rate of 9.20% for the three months ended
September 30, 1996.......................... -- -- 30,399
Tranche B term loan payable to bank; interest
based on Eurodollar rate as defined, plus
3.75% (9.19% at September 30, 1996);
interest payable at conversion date, but at
least quarterly; weighted average interest
rate of 9.59% for the three months ended
September 30, 1996.......................... -- -- 34,879
Subordinated promissory note payable;
interest at bank's Reference Rate, as
defined, plus 1% (10.00%, 9.25% and 9.25% at
June 30, 1995 and 1996 and at September 30,
1996, respectively) payable quarterly;
principal repayments of $60,000 made
quarterly until September 30, 1997; weighted
average interest rate of 9.67%, 9.76% and
9.25% for the years ended June 30, 1995 and
1996 and for the three months ended
September 30, 1996, respectively............ 600 300 240
Subordinated promissory note payable;
interest at bank's Reference Rate, as
defined, plus 1% (10.00%, 9.25% and 9.25% at
June 30, 1995 and 1996 and at September 30,
1996, respectively) subject to a ceiling of
10.50% and a floor of 8.50% payable monthly;
principal repayments of $8,333 per month
through February 1996; $83,333 per month
through February 1997, and $66,667 per month
from March 1997 through February 1999;
weighted average interest rate of 10.02%,
9.78% and 9.25% for the years ended June 30,
1995 and 1996 and for the three months ended
September 30, 1996, respectively............ 2,667 2,642 2,642
Other........................................ -- 63 186
------- ------- -------
$35,496 $42,530 $74,423
======= ======= =======
</TABLE>
F-13
<PAGE>
DOLLAR FINANCIAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(UNAUDITED WITH RESPECT TO SEPTEMBER 30, 1995 AND 1996)
The revolving credit facility, the term loan, and the acquisition loan
facility are provided pursuant to a $47 million credit agreement ("Credit
Agreement") dated June 30, 1994. In September 1995, the Company amended its
revolving credit facility to provide for borrowings of up to $10 million, with
a commitment fee of 1/2 of 1% charged on the unused portion of the commitment.
The term loan, revolving credit facility, and acquisition loans bear
interest at a rate of either the bank's reference rate (defined as the higher
of the bank's prime rate or the Federal Funds rate plus 1/4 of 1%) plus 1.25%
or the Eurodollar rate plus 2.50%. The rate of interest selected is at the
election of the Company provided, among other things, certain conversion
notices are delivered to the bank. The interest rates and payments have been
subsequently revised pursuant to the Amended and Restated Credit Agreement
discussed in Note 14. The term loan and acquisition loan facility,
collectively referred to as the "Tranche A term loans," have scheduled
principal payments as follows: $5,771,478 for the year ending June 30, 1997,
$6,390,004 for the year ending June 30, 1998, $7,132,236 for the year ending
June 30, 1999, and $5,720,292 through March 31, 2000, with the final payment
of the then-outstanding principal amount due June 30, 2000. Excess operating
cash payments as defined, are due after each year end. Such excess operating
cash payments will reduce future quarterly principal payments on a pro rata
basis.
As security for the above borrowings under the Credit Agreement, the banks
hold a security interest in the bank accounts, accounts receivable, and real
property of the Company. These loans contain certain financial and other
restrictive covenants, which, among other things, require the Company to
maintain minimum amounts of net worth, achieve certain financial ratios, limit
capital expenditures, restrict payment of dividends, and require certain
approvals in the event the Company wants to increase the borrowings.
As of June 30, 1996, the Company did not meet certain financial covenants.
This condition was waived by the lender through September 30, 1996. The
covenants have since been amended, pursuant to the Amended and Restated Credit
Agreement discussed in Note 14.
As of June 30, 1996, aggregate annual maturities of long-term debt and notes
payable are as follows (in thousands):
<TABLE>
<S> <C>
1997........................................... $ 8,673
1998........................................... 6,470
1999........................................... 7,152
2000........................................... 7,630
2001........................................... 12,605
-------
$42,530
=======
</TABLE>
Interest of $1,720,000 was paid for the year ended December 31, 1993,
$721,000 for the six months ended June 30, 1994, $2,413,000 and $3,226,000 for
the years ended June 30, 1995 and 1996, respectively, and $827,000 and
$1,219,000 for the three months ended September 30, 1995 and 1996,
respectively.
F-14
<PAGE>
DOLLAR FINANCIAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(UNAUDITED WITH RESPECT TO SEPTEMBER 30, 1995 AND 1996)
7. INCOME TAXES
The provision (benefit) for income taxes for the year ended December 31,
1993, the six months ended June 30, 1994, the years ended June 30, 1995 and
1996 and the three months ended September 30, 1995 and 1996 consists of the
following (in thousands):
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED
YEAR ENDED SIX MONTHS JUNE 30, SEPTEMBER 30,
DECEMBER 31, ENDED -------------- ---------------
1993 JUNE 30, 1994 1995 1996 1995 1996
------------ ------------- ------ ------- ------ -------
PREDECESSOR SUCCESSOR SUCCESSOR
<S> <C> <C> <C> <C> <C> <C>
Federal:
Current......... $-- $-- $ 215 $ -- $ 57 $ 161
Deferred........ -- -- 606 (1,181) 5 69
---- ---- ------ ------- ------ -------
-- -- 821 (1,181) 62 230
State:
Current......... 205 174 120 68 9 16
Deferred........ -- -- 81 (101) -- --
---- ---- ------ ------- ------ -------
205 174 201 (33) 9 16
---- ---- ------ ------- ------ -------
$205 $174 $1,022 $(1,214) $ 71 $ 246
==== ==== ====== ======= ====== =======
</TABLE>
The significant components of the Company's deferred tax assets and
liabilities at June 30, 1995 and 1996 and at September 30, 1996 are as follows
(in thousands):
<TABLE>
<CAPTION>
JUNE 30,
----------- SEPTEMBER 30,
1995 1996 1996
---- ------ -------------
<S> <C> <C> <C>
Deferred tax assets:
Net operating loss carryforward................. $292 $1,006 $ 822
Depreciation.................................... 284 315 307
Accrued compensation............................ 130 157 15
Reserve for store closings...................... -- 237 318
Other........................................... 112 146 146
---- ------ ------
818 1,861 1,608
Valuation allowance............................. 748 -- --
---- ------ ------
70 1,861 1,608
Deferred tax liabilities:
Amortization and other temporary differences.... 70 228 252
---- ------ ------
Net deferred tax asset............................ $-- $1,633 $1,356
==== ====== ======
</TABLE>
The Company did not record any valuation allowances against deferred tax
assets at June 30, 1996 or September 30, 1996. Realization is dependent on
generating sufficient taxable income prior to expiration of the loss
carryforwards. Although realization is not assured, management has determined,
based on the Company's history of earnings and its expectation for the future,
that taxable income of the Company will more likely than not be sufficient to
fully utilize its deferred income tax assets. The amount of the deferred tax
asset considered realizable, however, could be reduced in the near term if
estimates of future taxable income during the carryforward period are reduced.
F-15
<PAGE>
DOLLAR FINANCIAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(UNAUDITED WITH RESPECT TO SEPTEMBER 30, 1995 AND 1996)
A reconciliation of the (benefit) provision for income taxes with amounts
determined by applying the federal statutory tax rate to income (loss) before
income taxes is as follows (in thousands):
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED
YEAR ENDED SIX MONTHS JUNE 30, SEPTEMBER 30,
DECEMBER 31, ENDED --------------- ----------------
1993 JUNE 30, 1994 1995 1996 1995 1996
------------ ------------- ------ ------- ------ -------
PREDECESSOR SUCCESSOR
-------------------------- ---------------------------------
<S> <C> <C> <C> <C> <C> <C>
Tax (benefit) provision
at federal statutory
rate .................. $427 $369 $ 538 $(1,116) $ 5 $ 101
Add (deduct):
State tax (benefit)
provision, net of
federal tax
(provision) benefit.. 119 89 133 (22) 6 12
Amortization of
nondeductible
intangible assets.... 84 42 353 350 74 148
Change in valuation
allowance............ -- -- -- (456) -- --
Net operating loss
utilized............. (420) (352) -- -- -- --
Other permanent
differences.......... (5) 26 (2) 30 (14) (15)
---- ---- ------ ------- ------ -------
Tax (benefit) provision
at effective tax rate.. $205 $174 $1,022 $(1,214) $ 71 $ 246
==== ==== ====== ======= ====== =======
</TABLE>
At June 30, 1996, the Company had available for federal income tax purposes
and financial statement purposes net operating loss carryforwards of
$3,000,000 and $4,800,000, respectively. At September 30, 1996, the Company
had available for federal income tax purposes and financial statement purposes
net operating loss carryforwards of $2,400,000 and $4,000,000, respectively.
These losses begin to expire in 2005. The difference in net operating loss
carryforwards for financial reporting and income tax purposes is primarily
attributable to depreciation and amortization.
A greater than 50% change in ownership for purposes of Section 382 of the
Internal Revenue Code limits the annual utilization of net operating loss
carryforwards. The Company had undergone a greater than 50% change in
ownership as a result of the June 30, 1994 transaction discussed in Note 1. As
a result, the annual utilization of its pre-June 30, 1994 net operating loss
carryforwards is limited to approximately $1,000,000 per year. The allowable
deductions not utilized may be carried forward subject to the life of the net
operating loss carryforwards. For financial statement purposes, the Company's
utilization of its pre-June 30, 1994 net operating losses has resulted in a
reduction of goodwill arising from the acquisition.
Federal and state income taxes of approximately $134,000 were paid during
the year ended December 31, 1993, $272,000 for the six months ended June 30,
1994, $730,000 and $21,000 for the years ended June 30, 1995 and 1996,
respectively, and $27,000 and $15,000 for the three months ended September 30,
1995 and 1996, respectively.
8. COMMITMENTS
The Company occupies office and retail space and uses certain equipment
under operating lease agreements. Rent expense amounted to $1,881,000 for the
year ended December 31, 1993, $958,000 for the six months ended June 30, 1994,
$2,335,000 and $2,935,000 for the years ended June 30, 1995 and 1996,
respectively, and $704,000 and $1,040,000 for the three months ended September
30, 1995 and 1996, respectively. Most leases contain standard renewal clauses.
F-16
<PAGE>
DOLLAR FINANCIAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(UNAUDITED WITH RESPECT TO SEPTEMBER 30, 1995 AND 1996)
Minimum obligations under noncancelable operating leases for the year ended
June 30 are as follows (in thousands):
<TABLE>
<CAPTION>
YEAR AMOUNT
---- ------
<S> <C>
1997............................................ $2,716
1998............................................ 2,047
1999............................................ 1,405
2000............................................ 988
2001............................................ 524
Thereafter...................................... 193
------
$7,873
======
</TABLE>
The Company has entered into employment agreements with certain key
employees which have terms of three years and call for aggregate minimum
annual base salaries. The agreements also provide for annual incentive cash
bonuses which are primarily based on revenues and earnings from operations.
Under the terms of an employment contract, an officer received a loan in the
amount of $200,000. Interest accrues on the unpaid principal balance at a
fixed rate of 9.25%. The advance is payable on the first occurrence of (i)
June 30, 1997, (ii) 90 days following the voluntary resignation of the officer
or the termination of the officer's employment for cause, or (iii) one year
following the termination of the employment relationship between the officer
and the Company for any other reason.
9. CONTINGENT LIABILITIES
In the ordinary course of business, the Company is involved in certain
litigation. In the opinion of management, the ultimate resolution of such
litigation will not have a material effect on the financial condition of the
Company.
10. RELATED PARTY TRANSACTIONS
The Predecessor Company had five-year consulting agreements with certain
shareholders of Holdings under which the shareholders received $200,000
annually. An additional $200,000 was paid on May 1, 1991 pursuant to these
consulting agreements and was expensed over the life of the agreements. These
shareholders also received various incentive fees when the Predecessor
Company's revenues exceeded certain limits. The Predecessor Company charged
$182,057 and $0 to expense for the year ended December 31, 1993 and the six
months ended June 30, 1994, respectively, for such incentive fees. The
Predecessor Company's lender, which was also a shareholder, was paid $150,000
and $42,000, respectively, during 1993 and 1994, for certain credit facility
fees.
The Predecessor Company leased administrative and retail office space at
four locations from companies owned by a predecessor shareholder of Holdings.
The amounts paid to these companies were $238,000 and $112,000 for 1993 and
1994, respectively.
The Predecessor Company paid dividends to Holdings to fund Holdings'
dividend payments on its Preferred Stock. In addition, all proceeds from sales
of common stock of Holdings were immediately invested into the Company as
capital contributions by Holdings.
11. CONTRACTUAL AGREEMENTS
The Company has contracts with various governmental agencies for benefits
distribution and retail merchant services which contributed 58% of
consolidated gross revenues for the year ended December 31, 1993, 58% for the
six months ended June 30, 1994, 49% and 38% for the years ended June 30, 1995
and 1996, respectively, and 41% and 27% for the three months ended September
30, 1995 and 1996, respectively. The Company's
F-17
<PAGE>
DOLLAR FINANCIAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(UNAUDITED WITH RESPECT TO SEPTEMBER 30, 1995 AND 1996)
contracts with the Commonwealth of Pennsylvania, which are included in this
amount, contributed 29% of the revenues for the year ended December 31, 1993,
30% for the six months ended June 30, 1994, 24% and 18% for the years ended
June 30, 1995 and 1996, respectively, and 14% and 21% for the three months
ended September 30, 1995 and 1996, respectively. The Company's contract with
the State of New York contributed 18% of revenues for the year ended December
31, 1993, 18% for the six months ended June 30, 1994, 15% and 11% for the
years ended June 30, 1995 and 1996, respectively, and 12% and 8% for the three
months ended September 30, 1995 and 1996, respectively. Accounts receivable at
June 30, 1995 and 1996 and at September 30, 1996 include $2,745,000,
$3,464,000 and $3,280,000, respectively, of amounts due from various
governmental agencies. The Company does not require any collateral on these
receivables nor are these agencies considered a credit risk. The Company's
contracts for government benefits distribution and merchant services
distribution with state and local governments generally have initial terms of
five years and currently expire on various dates generally ranging from
December 31, 1998 through December 31, 1999. The contracts provide the
governmental agencies the opportunity to extend the contract for additional
periods and contain clauses which allow the governmental agencies to cancel
the contract at any time, subject to 30 to 60 days written advance notice.
12. CREDIT RISK
At June 30, 1995 and 1996 and at September 30, 1996, the Company had
sixteen, eighteen and twenty-two bank accounts, respectively, in major
financial institutions in the aggregate amount of $6,288,000, $9,821,000 and
$16,190,000, which exceeded Federal Deposit Insurance Corporation limits.
These financial institutions have strong credit ratings and management
believes credit risk relating to these deposits is minimal.
13. LOSS ON STORE CLOSINGS AND SALES
In December 1995, the Company decided to sell or close 19 store locations
purchased in February 1995. The decision resulted in a pretax charge of
approximately $4,400,000, which includes $3,300,000 for the write-off of the
goodwill associated with the original acquisition of these stores, $600,000
for the write-off of store fixtures and equipment, $350,000 for the early
termination of store leases, and $150,000 for the accrual for other costs
related to closing these locations. As of June 30, 1996, accrued expenses
include approximately $450,000 related to future costs associated with these
store locations, of which $220,000 is expected to be paid in 1997, $94,000 in
1998, $86,000 in 1999, and $50,000 in 2000. Included in the accompanying
consolidated statements of income for the years ended June 30, 1995 and 1996,
are revenues of $564,000 and $1,470,000, respectively, store expenses of
$931,000 and $2,352,000, respectively, and amortization expense of $30,000 and
$56,000, respectively, related to these stores. The Company is seeking to
restructure its obligations under the original subordinated note issued to the
seller as part of the acquisition, and has ceased making principal and
interest payments. As a result, the seller has filed a complaint against the
Company alleging, among other things, breach of contract, and is seeking
payment of the balance of the note of $2,642,000, plus accrued interest,
punitive damages and legal fees. As the outcome of this matter cannot be
determined at present, no reduction in the note payable to the seller or any
additional costs to the Company have been recorded.
14. SUBSEQUENT EVENTS
On August 8, 1996, the Company acquired all of the outstanding stock of
AnyKind Check Cashing Centers, Inc. and AnyKind Check Cashing Centers, Inc.'s
51%-owned partnership, U.S. Check Exchange Ltd. (collectively known as
"AnyKind") for $31,000,000, consisting of $29,000,000 in cash and the issuance
of 1,250 shares of Holdings common stock. AnyKind owned and operated 60 check
cashing centers at December 31, 1995 throughout California, Arizona,
Louisiana, Maryland, Hawaii, Washington D.C., Texas, and Pennsylvania. The
acquisition will be accounted for under the purchase method of accounting. For
its latest fiscal year ending December 31, 1995, AnyKind had operating
revenues of approximately $21,000,000 and income before income taxes of
approximately $2,800,000.
On August 28, 1996, the Company acquired the assets associated with the
operations of "ABC Check Cashing" ("ABC") for $6,000,000 in cash. ABC operates
approximately 15 check cashing centers within the Cleveland, Ohio area. The
acquisition will be accounted for under the purchase method of accounting. For
its
F-18
<PAGE>
DOLLAR FINANCIAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(UNAUDITED WITH RESPECT TO SEPTEMBER 30, 1995 AND 1996)
latest fiscal year ending December 31, 1995, ABC had operating revenues of
$4,800,000 and income before income taxes of approximately $12,000.
In order to finance these acquisitions, Holdings issued 13,750 shares of
common stock resulting in gross proceeds of $22,000,000 (the "Stock Purchase
Agreement"), which were contributed to the Company, and amended and restated
its credit agreement discussed in Note 6, which provided the Company with
$35,000,000 additional borrowing availability (known as the "Tranche B term
note"). The Company used these borrowings and a portion of the proceeds from
the stock issuance to fund the acquisitions of AnyKind and ABC and to pay
related fees and expenses. The Company intends to use the remaining proceeds
for general corporate purposes including potential future acquisitions.
Holdings also increased the number of authorized common shares to 50,000.
The Stock Purchase Agreement also increased the number of shares under option
by 2,100 shares, with an exercise price of $1,600 per share (the "Supplemental
Options"). In conjunction with the establishment of the Amended and Restated
Credit Agreement, Holdings issued warrants to purchase up to 1,955.53 shares
of Holdings' common stock to the lenders in consideration for execution of the
financing agreement. Under the terms of the warrant agreements, the exercise
price of the warrants is $.01 per share during the exercise period which
commences August 8, 1997 and ends August 8, 2006. In addition, the exercise
price of the warrants and the number of shares purchasable with each warrant
are adjusted whenever common stock is issued at a share price below the
current market value. If, prior to August 8, 1997, all amounts outstanding
under the Credit Agreement are repaid in full and the Credit Agreement is
terminated, then the warrants become void and are canceled. The shareholders
agreement discussed in Note 3 was also revised to give effect to the
transactions discussed herein.
The Tranche B term loan bears interest at a rate of either the bank's
reference rate plus 2.50% or the Eurodollar rate plus 3.75%. The interest
rates on the Company's existing term loan, revolving credit facility, and
acquisition loans are also adjusted under the Amended and Restated Credit
Agreement whereby the loans bear interest at a rate of either the bank's
reference rate plus 2.00% or the Eurodollar rate plus 3.25%. The rate of
interest selected is at the election of the Company provided, among other
things, certain conversion notices are delivered to the bank. Principal
payments of the Tranche B term loan of $78,750 are due quarterly through June
30, 2000, with three balloon payments of $8,435,000 each due on September 30,
2000, December 31, 2000, and March 31, 2001, with the then-outstanding
principal amount due on June 30, 2001.
15. UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED
JUNE 30, 1993
The statement of operations and balance sheet data for the six-month period
ended June 30, 1993 have been derived from the unaudited condensed
consolidated financial statements of the Company, and in the opinion of
management, include all adjustments (consisting of normal, recurring and other
adjustments) necessary for a fair presentation of such information.
<TABLE>
<S> <C>
Revenues.......................................................... $14,373
Store and regional expenses:
Salaries and benefits........................................... 4,242
Occupancy....................................................... 1,317
Depreciation.................................................... 579
Other........................................................... 4,000
-------
Total store and regional expenses................................. 10,138
Corporate expenses................................................ 2,358
Other depreciation and amortization............................... 752
Interest expense.................................................. 847
-------
Income before taxes............................................... 278
Income tax provision.............................................. 78
-------
Net income........................................................ $ 200
=======
</TABLE>
F-19
<PAGE>
DOLLAR FINANCIAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(UNAUDITED WITH RESPECT TO SEPTEMBER 30, 1995 AND 1996)
16. SUBSEQUENT EVENTS: REFINANCING AND ACQUISITIONS (UNAUDITED)
In November 1996, the Company implemented a financing plan which included
the issuance of $110.0 million of 10 7/8% senior notes due 2006 and the
establishment of a new revolving credit facility of $25.0 million. The
proceeds of the senior notes were used to repay all of the Company's existing
indebtedness under its credit agreements ($65.2 million) and to fund the
November 1996 acquisitions of National Money Mart, Inc., Cash-N-Dash Check
Cashing, Inc., and C&C Check Cashing, Inc.
F-20
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
Any Kind Check Cashing Centers, Inc.
and Consolidated Partnership
Cerritos, California
We have audited the accompanying consolidated balance sheets of Any Kind
Check Cashing Centers, Inc. and consolidated partnership as of December 31,
1995 and 1994, and the related consolidated statements of income, retained
earnings and minority interest in consolidated partnership and cash flows for
each of the three years in the period ended December 31, 1995. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Any Kind Check Cashing
Centers, Inc. and consolidated partnership as of December 31, 1995 and 1994,
and the results of their operations and their cash flows for each of the three
years in the period ended December 31, 1995, in conformity with generally
accepted accounting principles.
/s/ McGladrey & Pullen, LLP
Anaheim, California
February 23, 1996
F-21
<PAGE>
ANY KIND CHECK CASHING CENTERS, INC.
AND CONSOLIDATED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
----------------------- -----------
1994 1995 1996
ASSETS ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Current assets:
Cash (Note 2)................................ $15,789,430 $17,625,208 $12,761,932
Finance and other receivables................ 202,634 370,726 275,555
Prepaid expenses............................. 246,161 237,753 256,687
Deferred taxes (Note 8)...................... -- 91,000 91,000
----------- ----------- -----------
Total current assets....................... 16,238,225 18,324,687 13,385,174
----------- ----------- -----------
Equipment and leasehold improvements (Note 7):
Machinery and equipment...................... 1,228,106 1,250,536 1,293,532
Furniture and fixtures....................... 388,625 426,675 483,811
Leasehold improvement........................ 2,691,585 2,661,460 2,669,997
----------- ----------- -----------
4,308,316 4,338,671 4,447,340
Less accumulated depreciation................ 3,606,383 3,668,809 3,744,391
----------- ----------- -----------
701,933 669,862 702,949
Other assets:
Notes receivable, affiliates (Note 7)........ -- 3,700,000 4,621,435
Intangibles, net (Note 3).................... 263,335 229,580 212,701
Other assets................................. 359,494 361,785 349,552
----------- ----------- -----------
622,829 4,291,365 5,183,688
----------- ----------- -----------
$17,562,987 $23,285,914 $19,271,811
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Lines of credit (Note 4)..................... $ 3,314,129 $ 6,350,000 $ 1,940,039
Notes payable, stockholders (Note 4)......... 281,842 750,000 9,212,707
Accounts payable............................. 287,949 268,577 221,882
Accrued expenses (Note 5).................... 1,101,827 1,167,478 1,074,680
Money orders and telegraphic payables........ 1,854,085 2,342,231 1,928,201
Income taxes payable......................... 34,259 31,072 656,472
----------- ----------- -----------
Total current liabilities.................. 6,874,091 10,909,358 15,033,981
----------- ----------- -----------
Long-term debt, stockholders (Note 4).......... 1,141,000 9,212,707 --
----------- ----------- -----------
Minority interest in consolidated partnership.. 267,690 301,184 358,624
----------- ----------- -----------
Commitments and contingencies (Notes 5 and 6)
Stockholders' equity
Common stock, par value $.25 per share; au-
thorized 1,000,000 shares; issued and out-
standing 100,000 shares..................... 25,000 25,000 25,000
Additional paid-in capital................... 439,154 439,154 439,154
Retained earnings (Note 4)................... 8,816,052 2,398,511 3,415,052
----------- ----------- -----------
9,280,206 2,862,665 3,879,206
----------- ----------- -----------
$17,562,987 $23,285,914 $19,271,811
=========== =========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
F-22
<PAGE>
ANY KIND CHECK CASHING CENTERS, INC.
AND CONSOLIDATED PARTNERSHIP
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
------------------------------------- ------------------------
1993 1994 1995 1995 1996
----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues:
Check cashing fees.... $16,544,783 $16,793,252 $17,322,492 $ 8,819,386 $ 9,164,802
Other ancillary
financial services
(Note 7)............. 3,734,154 4,121,519 4,528,548 2,091,478 2,406,050
----------- ----------- ----------- ----------- -----------
20,278,937 20,914,771 21,851,040 10,910,864 11,570,852
----------- ----------- ----------- ----------- -----------
Expenses:
Salaries and
benefits............. 7,521,638 7,596,122 7,618,096 3,479,593 3,631,973
Other operating,
general and
administrative (Note
6)................... 6,524,267 6,571,622 6,584,141 3,580,431 3,755,535
Consulting fees to
related parties (Note
7)................... 3,239,489 3,045,199 3,652,576 651,045 1,150,275
Returned checks....... 1,467,279 1,266,346 1,112,467 645,341 632,613
Interest (Note 4)..... 134,845 159,914 81,839 37,066 464,213
----------- ----------- ----------- ----------- -----------
18,887,518 18,639,203 19,049,119 8,393,476 9,634,609
----------- ----------- ----------- ----------- -----------
Income before provision
for income taxes....... 1,391,419 2,275,568 2,801,921 2,517,388 1,936,243
Provision for income
taxes (benefit) (Note
8)..................... 46,278 66,698 (4,541) 36,000 680,000
----------- ----------- ----------- ----------- -----------
Income before minority
interest in net income
of consolidated
partnership............ 1,345,141 2,208,870 2,806,462 2,481,388 1,256,243
Minority interest in net
income of consolidated
partnership............ (481,550) (448,997) (424,003) (245,126) (239,702)
----------- ----------- ----------- ----------- -----------
Net income.............. $ 863,591 $ 1,759,873 $ 2,382,459 $ 2,236,262 $ 1,016,541
=========== =========== =========== =========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
F-23
<PAGE>
ANY KIND CHECK CASHING CENTERS, INC.
AND CONSOLIDATED PARTNERSHIP
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS AND
MINORITY INTEREST IN CONSOLIDATED PARTNERSHIP
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 AND
SIX MONTHS ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
MINORITY
INTEREST IN
RETAINED CONSOLIDATED
EARNINGS PARTNERSHIP
----------- ------------
<S> <C> <C>
Balances, January 1, 1993............................ $ 6,192,588 $ 423,738
Capital distributions to minority partners of part-
nership........................................... -- (608,217)
Net income......................................... 863,591 481,550
----------- ---------
Balances, January 1, 1994............................ 7,056,179 297,071
Capital distributions to minority partners of part-
nership........................................... -- (478,378)
Net income......................................... 1,759,873 448,997
----------- ---------
Balances, December 31, 1994.......................... 8,816,052 267,690
Capital distributions to minority partners of part-
nership........................................... -- (390,509)
Distributions to stockholders--$88.00 per share.... (8,800,000) --
Net income......................................... 2,382,459 424,003
----------- ---------
Balances, December 31, 1995.......................... 2,398,511 301,184
Capital distributions to minority partners of part-
nership (unaudited)............................... -- (182,262)
Net income (unaudited)............................. 1,016,541 239,702
----------- ---------
Balances, June 30, 1996 (unaudited).................. $ 3,415,052 $ 358,624
=========== =========
</TABLE>
See Notes to Consolidated Financial Statements.
F-24
<PAGE>
ANY KIND CHECK CASHING CENTERS, INC.
AND CONSOLIDATED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30,
------------------------------------- ------------------------
1993 1994 1995 1995 1996
----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from
operating activities:
Net income............. $ 863,591 $ 1,759,873 $ 2,382,459 $ 2,236,262 $ 1,016,541
Adjustments to
reconcile net income
to net cash provided
by operating
activities:
Depreciation and
amortization.......... 376,028 295,485 218,623 97,518 90,539
Deferred taxes......... -- -- (91,000) -- --
Minority interest in
partnership income.... 481,550 448,997 424,003 245,126 239,702
(Gain) loss on sale or
abandonment of
equipment and
leasehold
improvements.......... 34,955 8,584 (19,707)
Change in assets and
liabilities:
(Increase) decrease
in:
Accounts receivable.. (76,177) (45,406) (168,092) (16,542) 95,171
Prepaid expenses..... (7,234) (21,029) 8,408 2,131 (31,517)
Other assets......... (20,986) 93,718 (2,291) 14,629 11,925
Increase (decrease)
in:
Accounts payable..... 89,731 11,117 (19,372) (8,585) (46,696)
Accrued expenses..... (28,212) 270,118 65,651 (196,198) (92,797)
Income taxes
payable............. (6,389) 23,159 (3,187) (30,899) 625,400
Money orders and
telegraphic
payables............ (86,771) 570,029 488,146 (1,014,346) (414,030)
----------- ----------- ----------- ----------- -----------
Net cash provided by
operating activities... 1,620,086 3,414,645 3,283,641 1,329,096 1,494,238
----------- ----------- ----------- ----------- -----------
Cash flows from
investing activities:
Proceeds from sale of
equipment............. -- 192,821 84,000 -- --
Purchase of property,
equipment and
leasehold
improvements.......... (405,676) (353,718) (217,090) (88,825) (106,748)
Purchase of intangible
assets................ -- (78,000) -- -- --
Principal payments
received on notes
receivable from
related parties....... 97,075 1,000,000 -- -- --
Disbursements on notes
receivable from
related parties....... -- -- (3,700,000) (28,265) (908,543)
----------- ----------- ----------- ----------- -----------
Net cash provided by
(used in) investing
activities............. (308,601) 761,103 (3,833,090) (117,090) (1,015,291)
----------- ----------- ----------- ----------- -----------
Cash flows from
financing activities:
Principal payments on
borrowings from
related parties....... (11,274) (1,893,809) (1,141,000) (998,000) (750,000)
Principal payments on
notes payable......... 1,400,000 -- (281,842) -- --
Proceeds from
borrowings from
related parties....... -- -- 9,962,707 -- --
Net (payments)
borrowings on lines of
credit................ (500,000) (185,871) 3,035,871 (1,819,772) (4,409,961)
Capital distribution to
minority partners..... (608,217) (478,378) (390,509) (144,169) (182,262)
Capital distribution to
stockholders.......... -- -- (8,800,000) -- --
----------- ----------- ----------- ----------- -----------
Net cash provided by
(used in) financing
activities............. 280,509 (2,558,058) 2,385,227 (2,961,941) (5,342,223)
----------- ----------- ----------- ----------- -----------
Net (decrease) increase
in cash................ 1,591,994 1,617,690 1,835,778 (1,749,935) (4,863,276)
Cash
Beginning.............. 12,579,746 14,171,740 15,789,430 15,789,430 17,625,208
----------- ----------- ----------- ----------- -----------
Ending................. $14,171,740 $15,789,430 $17,625,208 $14,039,495 $12,761,932
=========== =========== =========== =========== ===========
Supplemental disclosures
of cash flow
information
Interest paid.......... $ 141,300 $ 160,520 $ 78,836 $ 37,066 $ 464,213
=========== =========== =========== =========== ===========
Income taxes paid...... $ 52,667 $ 43,540 $ 89,646 $ 66,899 $ 54,600
=========== =========== =========== =========== ===========
Supplemental schedule of
noncash investing and
financing activities,
purchase of a covenant
not-to-compete,
goodwill and equipment
acquired by seller
financing.............. $ -- $ 200,000 $ -- $ -- $ --
=========== =========== =========== =========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
F-25
<PAGE>
ANY KIND CHECK CASHING CENTERS, INC.
AND CONSOLIDATED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO JUNE 30, 1995 AND 1996 IS UNAUDITED)
NOTE 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Nature of business:
The Company owned and operated 57, 62 and 60 check cashing centers at
December 31, 1993, 1994 and 1995, respectively, under the name "Any Kind"
throughout California, Arizona, Louisiana, Maryland, Hawaii, Washington D.C.,
Texas and Pennsylvania. The centers provide check cashing and ancillary
financial services.
Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expense during the
reporting period. Actual results could differ form those estimates.
A SUMMARY OF THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES IS AS FOLLOWS:
Principles of Consolidation:
The accompanying consolidated financial statements include the accounts of
Any Kind Check Cashing Centers, Inc. (AKCCCI) and its 51%-owned partnership,
U.S. Check Exchange, Ltd. (U.S. Check), collectively referred to as the
Company. All material intercompany accounts and transactions have been
eliminated in consolidation.
Interim Financial Information:
The financial information presented as of and for the periods ending June 30
has been prepared from the books and records without audit. Such financial
information does not include all disclosures required by generally accepted
accounting principles. In the opinion of management, all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of the financial information for the periods indicated have been
included. The data disclosed in these notes to financial statements related to
the interim information are also unaudited.
Equipment and Leasehold Improvements:
Equipment is recorded at cost and depreciated over the estimated useful
lives of the related assets. Leasehold improvements are recorded at cost and
amortized over the shorter of their estimated useful lives or the life of the
lease. Depreciation and amortization are computed using the straight-line and
accelerated methods.
Intangible Assets:
The costs associated with the agreement not-to-compete and the goodwill is
being amortized over five and fifteen years, respectively.
Income Tax Matters and Change in Tax Status:
For the years ended December 31, 1993, 1994 and 1995 and the prior years,
the Company, with the consent of its stockholders, elected to be taxed as a
Subchapter S corporation. Accordingly, the stockholders separately account for
their pro rata shares of the Company's income, deductions, losses and credits
for federal tax purposes, and for state tax purposes in those states which
recognize the Subchapter S election. On December 30, 1995, the Company's
stockholders terminated this election effective on December 31, 1995.
As a result of the December 31, 1995 termination, on that date the Company
recorded a net deferred tax asset of $91,000, by a credit to income tax
expense, for temporary differences between the financial reporting and the
income tax basis of certain accruals and allowances.
F-26
<PAGE>
ANY KIND CHECK CASHING CENTERS, INC.
AND CONSOLIDATED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION WITH RESPECT TO JUNE 30, 1995 AND 1996 IS UNAUDITED)
Financial instruments:
In 1995, the Company adopted Financial Accounting Standards Board Statement
No. 107, which requires disclosure about the fair value of the Company's
financial instruments. The method and assumptions used to estimate the fair
value of the following classes of financial instruments were:
Notes receivable and advances--The interest rate on these notes floats
with bank prime rates, therefore, the estimated fair value approximates the
carrying amount.
Short-term debt--The carrying amount approximates fair value because of
the short maturity of these instruments.
Notes payable--The interest rate on these notes floats with bank prime
rates, therefore, the estimated fair value approximates the carrying
amount.
Guaranty--Management is unable to estimate the fair value of the
affiliated company's guaranty of the line of credit due to the nature of
the related party transactions and the fact that there is no similar market
for the instrument.
NOTE 2. CASH CONCENTRATION
At December 31, 1995, the Company has approximately $18,200,000 of operating
funds in seven separate financial institutions in excess of the FDIC insured
amount of $100,000 per financial institution.
NOTE 3. INTANGIBLE ASSETS
Intangible assets are comprised of the following:
<TABLE>
<CAPTION>
1994 1995
-------- --------
<S> <C> <C>
Covenant not-to-compete................................... $395,000 $395,000
Goodwill.................................................. 186,335 186,335
-------- --------
581,335 581,335
Less accumulated amortization............................. 318,000 351,755
-------- --------
$263,335 $229,580
======== ========
</TABLE>
NOTE 4. NOTES PAYABLE AND LONG-TERM DEBT
Notes payable:
<TABLE>
<S> <C>
Lines of credit (A).............................................. $6,350,000
==========
Note payable to stockholder, interest at a bank's prime rate
(8.5% at December 31, 1995), unsecured, due on demand (B)....... $ 750,000
==========
</TABLE>
Long-term debt:
<TABLE>
<S> <C>
Notes payable to stockholders, unsecured, subordinated to line
of credit bearing interest at a bank's prime rate (8.5% at
December 31, 1995), due on demand. Stockholders do not intend
to demand payment prior to January 1, 1997.................... $9,212,707
==========
</TABLE>
- --------
(A) The Company has loan agreements with a bank encompassing two unsecured
lines of credit. Under one line of credit, the Company can borrow up to
$4,350,000 through January 31, 1996 and $3,500,000 through May 1996. This
line of credit borrowing bears interest at the bank's prime rate (8.5% at
December 31, 1995). At
F-27
<PAGE>
ANY KIND CHECK CASHING CENTERS, INC.
AND CONSOLIDATED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION WITH RESPECT TO JUNE 30, 1995 AND 1996 IS UNAUDITED)
December 31, 1995, the Company had borrowings outstanding of $4,350,000. A
second credit line is available to the Company or an affiliate with a limit
of $2,000,000. This line of credit bears interest at the bank's prime rate
(8.5% at December 31, 1995) and expires in May 1996. At December 31, 1994
and 1995, the Company had borrowings outstanding of $2,000,000 against this
line. The Company agrees not to pay any of the subordinated debt without
prior approval from the bank. The lines are personally guaranteed by the
Company's majority stockholder and guaranteed by a company which is
affiliated through common ownership up to $5,500,000 each. In addition, the
Company guarantees the joint line of credit for $2,000,000. All agreements
contain certain covenants requiring the maintenance of certain financial
ratios, minimum tangible net worth and restrictions on payment of
dividends.
(B) The note payable to stockholder was paid off in January 1996.
Interest expense was paid on related party notes payable in the amount of
$108,867, $135,527 and $41,418 for the years ended December 31 1993,, 1994 and
1995, respectively.
NOTE 5. SELF-INSURANCE
The Company self-insures its employee group medical plan coverage up to the
first $50,000 in claims per participant per year. The Company accrued a
liability at December 31, 1993, 1994 and 1995 for those claims processed in
1994, 1995 and 1996 but incurred in 1993, 1994 and 1995.
NOTE 6. LEASE COMMITMENTS AND RELATED PARTY TRANSACTIONS
The Company leases its check cashing centers, office facilities and
equipment under noncancelable operating leases. One of the leases is with a
company related through common ownership and another lease is with a
stockholder. Minimum rental commitments under operating leases are as follows:
<TABLE>
<CAPTION>
YEAR ENDING
DECEMBER 31,
------------
<S> <C>
1996........................................................... $1,758,340
1997........................................................... 1,323,366
1998........................................................... 818,512
1999........................................................... 403,066
2000........................................................... 129,536
----------
$4,432,820
==========
</TABLE>
Rent expense totaled $1,713,159, $1,815,155 and $1,865,300 for the years
ended December 31, 1993, 1994 and 1995, respectively, and is included in other
operating, general and administrative expenses. Total rent expense to related
parties totaled $32,310 and $60,211 for the years ended December 31, 1994 and
1995, respectively.
NOTE 7. RELATED PARTY TRANSACTIONS
Consulting fees of $1,338,939, $1,043,199 and $1,118,018 for the years ended
December 31, 1993, 1994 and 1995, respectively, were paid to officers and
stockholders of the Company. Consulting fees of $1,900,000, $2,000,000 and
$2,463,138 were paid to an affiliate for the years ended December 31, 1993,
1994 and 1995, respectively.
Notes receivable, affiliates are notes from companies under common
ownership. The notes are unsecured, earn interest at the prime rate and are
due on demand. If no demand is made, they are due on December 31, 1996. The
notes receivable are classified as a long-term asset as repayment is not
expected within twelve months.
F-28
<PAGE>
ANY KIND CHECK CASHING CENTERS, INC.
AND CONSOLIDATED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION WITH RESPECT TO JUNE 30, 1995 AND 1996 IS UNAUDITED)
Interest earned on notes receivable amounted to approximately $65,000, $72,000
and $107,000 for the years ended December 31, 1993, 1994 and 1995,
respectively, and is included in other revenues in the accompanying
consolidated statements of income. There were no outstanding notes receivable
at December 31, 1994. The balance of the notes receivable at December 31, 1995
was $3,700,000.
Unaudited interim financial information: The Company advanced an additional
$900,000 to an affiliate during the six months ended June 30, 1996 under the
same terms as the amounts outstanding at December 31, 1995.
NOTE 8. INCOME TAXES
The components of the income tax provision for the years ended December 31,
1993, 1994 and 1995 are as follows:
<TABLE>
<CAPTION>
1993 1994 1995
------- ------- --------
<S> <C> <C> <C>
Current, state income taxes....................... $46,278 $66,698 $ 86,459
Deferred.......................................... -- -- (91,000)
------- ------- --------
$46,278 $66,698 $ (4,541)
======= ======= ========
</TABLE>
The income tax provision for the years ended December 31, 1993, 1994 and
1995 differs from the expected provision due to the recording of deferred tax
assets and the Subchapter S election does not apply to all states.
Deferred income taxes reflect the tax effects of temporary differences
between the value of assets and liabilities for financial reporting purposes
and the amounts used for income tax purposes. Significant components of the
Company's net deferred tax assets as of December 31, 1995 are as follows.
<TABLE>
<CAPTION>
1993 1994 1995
---- ---- -------
<S> <C> <C> <C>
Deferred Tax Assets
State income taxes....................................... $-- $-- $27,000
Accrued expenses......................................... -- -- 56,000
Receivable allowance..................................... -- -- 8,000
---- ---- -------
$-- $-- $91,000
==== ==== =======
</TABLE>
Unaudited interim financial information: For the six months ended June 30,
1996 the Company was no longer a Subchapter S corporation for income tax
reporting purposes therefore tax expense is recorded for the applicable taxes
on income. The effective tax rate is different from the amount expected due to
the minority interest portion of the income from the consolidated partnership
is not subject to tax at the corporate level which is approximately $94,000
and state taxes net of federal benefit of $96,000. There was no change in
deferred income taxes for the six months ended June 30, 1996 and there is no
valuation allowance on deferred tax assets.
NOTE 9. SUBSEQUENT EVENT (UNAUDITED)
On August 8, 1996, the stockholders sold all of the outstanding stock of the
Company for $31,000,000. Prior to the sale, the Company distributed all of the
assets and liabilities to the stockholders except certain prepaid expenses,
rent deposits, leasehold improvements and equipment. The bank line of credit
was extended to August 1, 1996 and canceled upon sale of the stock. No amounts
were outstanding at the time of cancellation. No adjustments have been made to
the carrying values of assets or liabilities as a result of the sale of stock.
F-29
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
DFG Holdings, Inc.
We have audited the accompanying combined statements of income and of cash
flows of L.M.S. Development Corporation, Pacific Ring Enterprises, Inc., and
NCCI Corporation, collectively doing business as Chex$Cashed, for the year
ended December 31, 1994. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the results of operations and cash flows of L.M.S.
Development Corporation, Pacific Ring Enterprises, Inc., and NCCI Corporation,
collectively doing business as Chex$Cashed, for the year ended December 31,
1994, in conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
August 30, 1996
F-30
<PAGE>
L.M.S. DEVELOPMENT CORPORATION, PACIFIC RING ENTERPRISES, INC.,
AND NCCI CORPORATION,
COLLECTIVELY DOING BUSINESS AS CHEX$CASHED
COMBINED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1994
(DOLLARS IN THOUSANDS)
<TABLE>
<S> <C>
Revenues................................................................ $5,903
Store expenses:
Salaries and benefits................................................. 1,658
Occupancy............................................................. 747
Depreciation and amortization......................................... 51
Other................................................................. 967
------
Total store expenses.................................................... 3,423
Corporate expenses...................................................... 2,028
Interest expense........................................................ 233
------
Income before taxes..................................................... 219
Income tax provision.................................................... 67
------
Net income.............................................................. $ 152
======
</TABLE>
See accompanying notes.
F-31
<PAGE>
L.M.S. DEVELOPMENT CORPORATION, PACIFIC RING ENTERPRISES, INC.,
AND NCCI CORPORATION,
COLLECTIVELY DOING BUSINESS AS CHEX$CASHED
COMBINED STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1994
(DOLLARS IN THOUSANDS)
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income............................................................ $ 152
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization....................................... 51
Change in assets and liabilities:
Decrease in accounts receivable................................... 37
Increase in prepaid expenses and other assets..................... (9)
Increase in accounts payable and accrued expenses................. 345
------
Net cash provided by operating activities............................. 576
CASH FLOWS FROM INVESTING ACTIVITIES
Net disposals of properties and equipment............................. 37
------
Net cash provided by investing activities............................. 37
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on long-term debt............................................ (534)
Proceeds from long-term debt.......................................... 300
------
Net cash used in financing activities................................. (234)
------
Net increase in cash ................................................. 379
Cash at beginning of year............................................. 2,079
------
Cash at end of year................................................... $2,458
======
</TABLE>
See accompanying notes.
F-32
<PAGE>
L.M.S. DEVELOPMENT CORPORATION, PACIFIC RING ENTERPRISES, INC.,
AND NCCI CORPORATION, COLLECTIVELY DOING BUSINESS AS CHEX$CASHED
NOTES TO COMBINED FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1994
1. DESCRIPTION OF THE COMPANY
L.M.S. Development Corporation ("LMS"), Pacific Ring Enterprises, Inc.
("PRE"), and NCCI Corporation ("NCCI") (collectively known as the "Company")
conduct business as Chex$Cashed(R), providing check cashing, money order, and
related services to the general public through a network of approximately
twenty stores in four states.
2. SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The Company employs accounting policies that are in accordance with
generally accepted accounting principles, which require management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
Property and Equipment
Office properties and equipment are recorded at cost and depreciated over
the estimated useful lives of the related assets. Leasehold improvements are
recorded at cost and amortized over the shorter of their estimated lives or
the life of the lease. Depreciation is provided on the straight-line method.
Estimated useful lives of the assets vary from five to thirty years.
Store Expenses
The direct costs incurred in operating the Company's stores have been
classified as store expenses. Store expenses include salaries and benefits of
store employees, rent and other occupancy costs, depreciation of properties
and equipment, bank charges, armored security costs, net returned checks, cash
shortages, and other costs incurred by the stores. Excluded from store
operations are the corporate expenses of the Company which include salaries
and benefits of corporate employees, professional fees, and travel costs.
Income Taxes
NCCI has elected to be taxed as an "S" corporation as defined in the
Internal Revenue Code. Taxable income for NCCI is included in the respective
shareholders' personal income tax returns. Accordingly, no federal income tax
has been provided for NCCI. Income tax expense has been provided for LMS and
PRE.
The Company uses the liability method to account for income taxes.
Accordingly, deferred income taxes have been determined by applying current
tax rates to temporary differences between the amount of assets and
liabilities determined for income tax and financial reporting purposes.
Each Company files a separate tax return and maintains a December 31 year
end for tax purposes.
Advertising Costs
The Company expenses advertising costs as incurred. Advertising costs
charged to expense were $68,000 in 1994.
F-33
<PAGE>
L.M.S. DEVELOPMENT CORPORATION, PACIFIC RING ENTERPRISES, INC.,
AND NCCI CORPORATION, COLLECTIVELY DOING BUSINESS AS CHEX$CASHED
NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
Cash and Cash Equivalents
Certificates of deposit included in cash and cash equivalents have original
maturities of three months or less.
3. DEBT
The Company has a $500,000 line of credit which bears interest at the bank's
prime rate plus 1% (9.5% at December 31, 1994). The Company has granted a
security interest to the bank in the Company's $200,000 certificate of
deposit. The line of credit contains certain financial covenants which, among
other things, require the Company to maintain minimum amounts of net worth,
achieve certain financial ratios, and require certain approvals in the event
the Company wants to pay dividends.
Long-Term Debt consists of the following as of December 31, 1994 (in
thousands):
<TABLE>
<S> <C>
Unsecured demand note payable to shareholder, interest at 10%,
payable monthly. ................................................... $ 414
Unsecured demand note payable to shareholder, interest at 10%,
payable monthly. ................................................... 341
Note payable to bank with interest at the bank's prime rate plus 1%
(9.5% at December 31, 1994), payable monthly. Principal paid in full
on August 3, 1995. ................................................. 150
Mortgage note payable in monthly installments. Interest at the rate
of three-year U.S. Treasury notes (6.0% at December 31, 1994) plus
3% with adjustments scheduled every third year thereafter. Final
payments due November 2003, secured by real estate and personal
guarantees of shareholders. ........................................ 76
Unsecured demand note payable to shareholder, interest at 3.85%,
payable monthly. ................................................... 100
Unsecured note payable to officer, interest at 12%, payable
monthly. ........................................................... 536
Promissory note payable to shareholder bearing interest of 8.47% with
monthly payments of $9,720 through June 1, 1997, secured by
mortgages and liens on assets of the Company. ...................... 257
Various other........................................................ 172
------
Total.............................................................. $2,046
======
</TABLE>
Interest of $233,000 was paid during the year ended December 31, 1994.
4. INCOME TAXES
The provision for income taxes for the year ended December 31, 1994 consists
of the following (in thousands):
<TABLE>
<S> <C>
Federal:
Current............................................................. $55
Deferred............................................................ --
---
55
State:
Current............................................................. 12
Deferred............................................................ --
---
12
---
$67
===
</TABLE>
F-34
<PAGE>
L.M.S. DEVELOPMENT CORPORATION, PACIFIC RING ENTERPRISES, INC.,
AND NCCI CORPORATION, COLLECTIVELY DOING BUSINESS AS CHEX$CASHED
NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
A reconciliation of the provision for income taxes with amounts determined
by applying the federal statutory tax rate to income before income taxes is as
follows (in thousands):
<TABLE>
<S> <C>
Tax provision at federal statutory rate.............................. $ 74
Add (deduct):
Decrease in taxes resulting from income attributable to corporation
electing to be taxed as an "S" Corporation........................ (11)
Tax rate differential.............................................. (8)
State taxes, net of Federal benefit................................ 12
----
Tax provision at effective tax rate.................................. $ 67
====
</TABLE>
Income taxes of $16,509 were paid during 1994.
5. COMMITMENTS
The Company occupies office and retail space and uses certain equipment
under operating lease agreements. Rent expense amounted to $577,000 for the
year ended December 31, 1994. Most leases contain standard renewal clauses.
Minimum obligations under noncancelable operating leases for the year ended
December 31 are as follows (in thousands):
<TABLE>
<CAPTION>
YEAR AMOUNT
---- ------
<S> <C>
1995............................................................... $ 355
1996............................................................... 341
1997............................................................... 301
1998............................................................... 211
1999............................................................... 134
Thereafter......................................................... 94
------
$1,436
======
</TABLE>
6. STORE CLOSING
In June 1994, the Company was unable to renew its contract to operate its
store located within a Wisconsin casino. For the year ended December 31, 1994,
this store contributed gross revenues of $506,000 and income before taxes of
$270,000.
7. RELATED PARTY TRANSACTIONS
Management fees are paid to major shareholders of the Company. Management
fee expense amounted to $1,064,000 for the year ended December 31, 1994 and is
included in corporate expenses in the accompanying combined statement of
income.
The Company has notes payable with certain shareholders and officers as
discussed in Note 3. Interest paid on these notes amounted to $210,000 for the
year ended December 31, 1994.
8. SUBSEQUENT EVENT
On July 28, 1995, the Company entered into an agreement to sell all of the
outstanding stock of LMS and PRE and selected assets of NCCI. The sale was
completed on September 18, 1995.
F-35
<PAGE>
AUDITOR'S REPORT
To the Directors and Shareholders of
National Money Mart Inc.
We have audited the consolidated balance sheet of National Money Mart Inc.
as at December 31, 1995 and the consolidated statements of income and retained
earnings and cash flow for the year then ended. These financial statements are
the responsibility of the company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform our audit to
obtain reasonable assurance whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation.
In our opinion, these consolidated financial statements present fairly, in
all material respects, the financial position of the company as at December
31, 1995 and the results of its operations and the changes in its financial
position for the year then ended in accordance with generally accepted
accounting principles.
/s/ Ernst & Young
Chartered Accountants
Victoria, Canada
March 6, 1996.
F-36
<PAGE>
NATIONAL MONEY MART INC.
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
AS AT DECEMBER 31, AS AT
------------------- SEPTEMBER 30,
1994 1995 1996
--------- --------- -------------
$CN $CN $CN
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current
Cash........................................ 7,053,100 4,760,700 5,170,100
Accounts receivable......................... 848,900 1,097,600 753,100
Inventory, at cost.......................... 43,800 36,200 39,600
Prepaid expenses and deposits............... 88,200 103,100 153,100
--------- --------- ---------
Total current assets........................ 8,034,000 5,997,600 6,115,900
Investments and advances [note 2]........... 107,900 151,100 232,100
--------- --------- ---------
Capital assets [note 3]..................... 1,541,500 1,839,800 1,687,400
--------- --------- ---------
9,683,400 7,988,500 8,035,400
========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable............................ 1,294,400 1,308,200 1,031,700
Management salaries payable................. 3,076,600 2,655,000 2,618,000
--------- --------- ---------
Total current liabilities................... 4,371,000 3,963,200 3,649,700
Deferred income taxes....................... 12,000 12,000 12,000
Deferred revenue............................ -- -- 465,000
Due to shareholders and related parties
[note 4]................................... 2,764,700 1,554,700 1,486,100
Minority interest........................... 172,600 114,400 78,400
--------- --------- ---------
Total liabilities........................... 7,320,300 5,644,300 5,691,200
--------- --------- ---------
Shareholders' equity
Share capital [note 5]...................... 300 300 300
Retained earnings........................... 2,362,800 2,343,900 2,343,900
--------- --------- ---------
Total shareholders' equity.................. 2,363,100 2,344,200 2,344,200
--------- --------- ---------
9,683,400 7,988,500 8,035,400
========= ========= =========
</TABLE>
Approved on behalf of the Directors:
Director Director
See accompanying notes
F-37
<PAGE>
NATIONAL MONEY MART INC.
CONSOLIDATED STATEMENT OF INCOME
AND RETAINED EARNINGS
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
----------------------- -------------------
1994 1995 1995 1996
----------- ----------- --------- ---------
$CN $CN $CN $CN
(UNAUDITED)
<S> <C> <C> <C> <C>
REVENUE
Fees and royalties............... 11,613,100 12,147,900 9,118,000 9,749,000
Equity share of earnings on
investments..................... 131,200 87,200 66,000 47,000
Interest and other income........ 143,500 191,700 145,000 145,000
----------- ----------- --------- ---------
11,887,800 12,426,800 9,329,000 9,941,000
Operating expenses (Note 4)...... 8,454,900 9,646,300 6,881,000 7,323,000
----------- ----------- --------- ---------
3,432,900 2,780,500 2,448,000 2,618,000
Management salaries.............. 3,076,600 2,730,000 2,270,000 2,618,000
----------- ----------- --------- ---------
356,300 50,500 178,000 --
Gain on disposal of shares....... 12,600 -- -- --
Loss on disposal of capital
assets.......................... -- 400 -- --
----------- ----------- --------- ---------
Income before income taxes and
minority interest............... 368,900 50,100 178,000 --
Income taxes
current........................ 54,800 47,200 35,000 --
deferred....................... 7,500 -- -- --
----------- ----------- --------- ---------
Income before minority interest.. 306,600 2,900 143,000 --
Income attributable to minority
interest........................ 54,700 21,800 16,000 --
----------- ----------- --------- ---------
Net income (loss) for the year... 251,900 (18,900) 127,000 --
Retained earnings, beginning of
year............................ 2,110,900 2,362,800 2,362,800 2,343,900
----------- ----------- --------- ---------
Retained earnings, end of year... 2,362,800 2,343,900 2,489,800 2,343,900
=========== =========== ========= =========
</TABLE>
See accompanying notes
F-38
<PAGE>
NATIONAL MONEY MART INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
------------------------- ---------------------
1994 1995 1995 1996
----------- ------------ ---------- ---------
$CN $CN $CN $CN
(UNAUDITED)
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net income (loss) for the
year....................... 251,900 (18,900) 127,000 --
Add charges (deduct credits)
to operations not requiring
a current cash payment
Loss on disposal of capital
assets..................... -- 400 -- --
Amortization................ 375,900 460,800 250,000 347,000
Deferred income tax
(recovery)................. 7,500 -- -- --
Equity share of earnings on
investments................ (131,200) (87,200) (66,000) (47,000)
Income attributable to
minority interest.......... 54,700 21,800 16,000 --
----------- ------------ ---------- ---------
558,800 376,900 327,000 300,000
Net change in non-cash
working capital balances
related to operations...... 1,697,200 (666,300) (1,593,900) 451,100
----------- ------------ ---------- ---------
Cash provided by (used in)
operating activities....... 2,256,000 (289,400) (1,266,900) 751,000
----------- ------------ ---------- ---------
INVESTING ACTIVITIES
Additions to capital
assets..................... (559,500) (759,500) (331,000) (257,100)
Advances (to) from investees
and related companies...... (273,100) 44,000 33,000 44,000
Advances to subsidiaries.... (48,000) (80,000) (60,000) (60,000)
----------- ------------ ---------- ---------
Cash used in investing
activities................. (880,600) (795,500) (358,000) (273,100)
----------- ------------ ---------- ---------
FINANCING ACTIVITIES
Advances to (from)
shareholders and related
parties.................... 45,900 (1,207,500) (65,000) (68,600)
----------- ------------ ---------- ---------
Cash provided by (used in)
financing activities....... 45,900 (1,207,500) (65,000) (68,600)
----------- ------------ ---------- ---------
Net increases (decrease) in
cash during the year....... 1,421,300 (2,292,400) (1,689,900) 409,400
Cash, beginning of year..... 5,631,800 7,053,100 7,053,100 4,760,700
----------- ------------ ---------- ---------
Cash, end of year........... 7,053,100 4,760,700 5,363,200 5,170,100
=========== ============ ========== =========
</TABLE>
See accompanying notes
F-39
<PAGE>
NATIONAL MONEY MART INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
On December 31, 1995 National Money Mart Inc. amalgamated with Vancouver
Money Mart Inc., 397662 B.C. Ltd., 397661 B.C. Ltd., 376461 B.C. Ltd.,
B.P.Y.A. 668 Holdings Ltd., Calgary Money Mart Inc. and Alberta Money Mart
Inc. to become National Money Mart Inc. The financial statements have been
presented on the continuity basis of accounting.
Consolidation
The consolidated financial statements include the accounts of National Money
Mart Inc. and its wholly-owned subsidiaries, Capital Money Mart Inc. and
537993 Alberta Ltd. Also included are the accounts of a partnership, Ottawa
Money Mart, in which the company holds a 60% interest.
Equity method of accounting
The company accounts for its investments in the following companies and
partnership using the equity method:
<TABLE>
<CAPTION>
INVESTEE % INTEREST
-------- ----------
<S> <C>
Calgary Money Mart Partnership.................................... 13.5
Gent Isle Holdings Ltd............................................ 28
First Island Armoured Transport Ltd............................... 50
</TABLE>
Other Investments and Advances
Other investments and advances are recorded at the lower of cost and net
realizable value.
Amortization
Assets are amortized on the declining balance method except leasehold
improvements and goodwill which are amortized on the straight-line basis.
Amortization is provided using the following annual rates:
<TABLE>
<S> <C>
Automobile............................................................... 30%
Furniture and equipment.................................................. 20%
Leasehold improvements................................................... 20%
Goodwill................................................................. 10%
</TABLE>
F-40
<PAGE>
NATIONAL MONEY MART INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
2. INVESTMENTS AND ADVANCES
<TABLE>
<CAPTION>
1994 1995
------- -------
$CN $CN
<S> <C> <C>
Gent Isle Holdings Ltd.
14 common shares representing a 28% interest................. 100 100
Equity share of earnings, net of dividends received.......... 1,700 1,100
Advances..................................................... 21,100 43,500
------- -------
22,900 44,700
------- -------
Cash Canada Plan Corp.--5,000 shares......................... 1,800 1,800
------- -------
Ottawa Money Mart Inc. ...................................... 2,500 2,500
------- -------
Calgary Money Mart [a Partnership]
13.5% interest, equity share of earnings, net of advances re-
ceived...................................................... 7,800 15,100
------- -------
First Island Armoured Transport Ltd.
60 common shares representing a 50% interest................. 100 100
Advances..................................................... 72,800 136,600
Equity share of losses....................................... -- (49,700)
------- -------
72,900 87,000
------- -------
107,900 151,100
======= =======
</TABLE>
3. CAPITAL ASSETS
<TABLE>
<CAPTION>
1994
--------------------------------
ACCUMULATED NET BOOK
COST AMORTIZATION VALUE
$CN $CN $CN
--------- ------------ ---------
<S> <C> <C> <C>
Furniture and equipment........................ 1,611,500 797,400 814,100
Leasehold improvements......................... 1,301,300 721,800 579,500
Automotive..................................... 21,500 8,000 13,500
Goodwill....................................... 246,900 112,500 134,400
--------- --------- ---------
3,181,200 1,639,700 1,541,500
========= ========= =========
<CAPTION>
1995
--------------------------------
ACCUMULATED NET BOOK
COST AMORTIZATION VALUE
$CN $CN $CN
--------- ------------ ---------
<S> <C> <C> <C>
Furniture and equipment........................ 1,848,000 990,700 857,300
Leasehold improvements......................... 1,824,500 941,400 883,100
Automotive..................................... 12,800 -- 12,800
Goodwill....................................... 147,800 61,200 86,600
--------- --------- ---------
3,833,100 1,993,300 1,839,800
========= ========= =========
</TABLE>
4. RELATED PARTY TRANSACTIONS
Lease payments of $CN124,400 and $CN142,600 were made to the company's
shareholders for the rental of the company's corporate headquarters and for
two store locations for the years ended December 31, 1994 and 1995,
respectively.
F-41
<PAGE>
NATIONAL MONEY MART INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Interest of $CN229,600 and $CN262,000 was paid on the funds advanced to the
company by the shareholders and related parties for the years ended December
31, 1994 and 1995, respectively. Interest on these balances is payable at
prime plus 2% per annum. There are no specific terms of repayment for the
amounts due to shareholders and the shareholders do not intend to demand
repayment during the next fiscal year.
5. SHARE CAPITAL
<TABLE>
<CAPTION>
1994 1995
---- ----
$CN $CN
<S> <C> <C>
Authorized
10,000 Class A common shares.....................................
Issued
10,000 Class A common shares..................................... 300 300
</TABLE>
On the effective date of the amalgamation, all shares of Vancouver Money
Mart Inc., 397662 B.C. Ltd., 397661 B.C. Ltd., 376461 B.C. Ltd. B.P.Y.A. 668
Holdings Ltd., Calgary Money Mart Inc. and Alberta Money Mart Inc. were
canceled without any repayment of capital in respect of such shares. Also on
that date the issued share capital of National Money Mart Inc. was deemed to
be converted into authorized and issued share capital of the amalgamated
corporation by conversion of all of the shares into issued share capital of
10,000 Class A common shares.
6. COMMITMENTS
The company leases its office premises and certain store locations. Annual
minimum lease payments, which do not include renewal options, for the next
five years are estimated to be as follows:
<TABLE>
<CAPTION>
$CN
---------
<S> <C>
1996............................................................... 1,081,000
1997............................................................... 937,000
1998............................................................... 692,000
1999............................................................... 543,000
2000............................................................... 89,000
---------
3,342,000
---------
</TABLE>
7. DIFFERENCES BETWEEN CANADIAN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("CN
GAAP") AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("US
GAAP")
The accompanying consolidated financial statements have been prepared in
accordance with CN GAAP, and presented in Canadian Dollars. The accounting
policies of the company also comply, in all material respects, with US GAAP as
at December 31, 1994, December 31, 1995 and September 30, 1996 and therefore
the financial results would not require amendment if the financial statements
were to be prepared in accordance with US GAAP.
F-42
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
DFG Holdings, Inc.
We have audited the accompanying balance sheets of Cash-N-Dash Check
Cashing, Inc. as of December 31, 1995 and 1994, and the related statements of
income, shareholders' equity, and cash flows for each of the two years in the
period ended December 31, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Cash-N-Dash Check Cashing,
Inc. at December 31, 1995 and 1994, and the results of its operations and its
cash flows for each of the two years in the period ended December 31, 1995, in
conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
November 8, 1996
F-43
<PAGE>
CASH-N-DASH CHECK CASHING, INC.
BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
-------------- -------------
1994 1995 1996
------ ------ -------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Cash............................................ $ 543 $ 674 $ 530
Accounts and loans receivable, net of allowance
for doubtful accounts of $35, $50 and $24...... 299 302 382
Properties and equipment, net of accumulated de-
preciation of $609, $746 and $845 ............. 593 402 304
Prepaid expenses and other assets............... 246 92 81
Note receivable--officer........................ 92 -- --
------ ------ ------
$1,773 $1,470 $1,297
====== ====== ======
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued liabilities........ $ 262 $ 310 $ 300
Money orders payable............................ 1,305 1,201 934
Notes payable................................... 794 544 544
Shareholders' equity:
Common stock, $1 par value; 10,000 shares
authorized, 4,000 shares outstanding........... 4 4 4
Accumulated deficit............................ (576) (573) (469)
Less cost of common stock in treasury (167
shares)....................................... (16) (16) (16)
------ ------ ------
Total shareholders' equity...................... (588) (585) (481)
------ ------ ------
$1,773 $1,470 $1,297
====== ====== ======
</TABLE>
See accompanying notes.
F-44
<PAGE>
CASH-N-DASH CHECK CASHING, INC.
STATEMENTS OF INCOME
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
----------------------- -------------
1994 1995 1995 1996
----------- ----------- ------ ------
(UNAUDITED)
<S> <C> <C> <C> <C>
Revenues:
Check cashing.......................... $ 2,683 $ 2,977 $2,301 $2,217
Food stamp distribution................ 728 1,898 1,306 1,442
Other.................................. 894 1,375 1,075 849
----------- ----------- ------ ------
Total revenues........................... 4,305 6,250 4,682 4,508
Store and regional expenses:
Salaries and benefits.................. 1,393 1,869 1,354 1,296
Occupancy.............................. 654 801 533 582
Depreciation........................... 160 134 100 70
Other.................................. 684 1,182 828 498
----------- ----------- ------ ------
Total store and regional expenses........ 2,891 3,986 2,815 2,446
Corporate expenses....................... 672 812 434 506
Other depreciation and amortization...... 35 53 40 30
Interest expense......................... 88 95 70 43
----------- ----------- ------ ------
Income before taxes...................... 619 1,304 1,323 1,483
Income tax provision..................... 9 20 20 26
----------- ----------- ------ ------
Net income............................... $ 610 $ 1,284 $1,303 $1,457
=========== =========== ====== ======
</TABLE>
See accompanying notes.
F-45
<PAGE>
CASH-N-DASH CHECK CASHING, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
(IN THOUSANDS EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
COMMON STOCK ACCUMULATED TREASURY SHAREHOLDERS'
SHARES AMOUNT DEFICIT STOCK EQUITY
------ ------ ----------- -------- -------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1993.... 4,000 $ 4 $ (416) $(16) $ (428)
Distributions to
shareholders............... -- -- (770) -- (770)
Net income for the year
ended December 31, 1994.... -- -- 610 -- 610
----- ---- ------ ---- ------
Balance, December 31, 1994.... 4,000 4 (576) (16) (588)
Distributions to
shareholders............... -- -- (1,281) -- (1,281)
Net income for the year
ended December 31, 1995.... -- -- 1,284 -- 1,284
----- ---- ------ ---- ------
Balance, December 31, 1995.... 4,000 4 (573) (16) (585)
Distributions to
shareholders (unaudited)... -- -- (1,353) -- (1,353)
Net income for the nine
months ended September 30,
1996 (unaudited)........... -- -- 1,457 -- 1,457
----- ---- ------ ---- ------
Balance, September 30, 1996
(unaudited).................. 4,000 $ 4 $ (469) $(16) $ (481)
===== ==== ====== ==== ======
</TABLE>
See accompanying notes.
F-46
<PAGE>
CASH-N-DASH CHECK CASHING, INC.
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
--------------- ----------------
1994 1995 1995 1996
------ ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income................................. $ 610 $ 1,284 $ 1,303 $ 1,457
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization............ 195 187 140 100
Loss on disposal of properties and
equipment............................... -- 70 -- --
Allowance for doubtful accounts.......... 35 15 (21) (24)
Change in assets and liabilities:
Increase in accounts receivable......... (269) (18) (100) (56)
Decrease in prepaid expenses and other
assets................................. 32 126 114 11
(Decrease) increase in money orders
payable................................ (190) (104) 116 (267)
Increase (decrease) in accounts payable
and accrued expenses................... 137 48 32 (10)
------ ------- ------- -------
Net cash provided by operating activities.. 550 1,608 1,584 1,211
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to properties and equipment...... (310) (38) (19) (2)
------ ------- ------- -------
Net cash used in investing activities...... (310) (38) (19) (2)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on long-term debt................. (193) (250) (50) --
Proceeds from long-term debt............... 145 -- -- --
Decrease in notes receivable--Officer...... -- 92 92 --
Distributions to shareholders.............. (770) (1,281) (1,132) (1,353)
------ ------- ------- -------
Net cash used in financing activities...... (818) (1,439) (1,090) (1,353)
------ ------- ------- -------
Net (decrease) increase in cash............ (578) 131 475 (144)
Cash at beginning of year.................. 1,121 543 543 674
------ ------- ------- -------
Cash at end of year........................ $ 543 $ 674 $ 1,018 $ 530
====== ======= ======= =======
</TABLE>
See accompanying notes.
F-47
<PAGE>
CASH-N-DASH CHECK CASHING, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1994 AND 1995
(UNAUDITED WITH RESPECT TO SEPTEMBER 30, 1995 AND 1996)
1. DESCRIPTION OF THE COMPANY
Cash-N-Dash Check Cashing, Inc. (the "Company") which conducts business as
Cash-N-Dash, provides check cashing, sales of money orders, money transfer
services, distribution of food stamp benefits, and various other related
services to the general public through a network of approximately thirty
stores in California.
2. SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
PROPERTY AND EQUIPMENT
Office properties and equipment are recorded at cost and depreciated over
the estimated useful lives of the related assets. Leasehold improvements are
recorded at cost and amortized over the shorter of their estimated lives or
the life of the lease. Depreciation is computed using the straight-line
method. Estimated useful lives of the assets vary from three to seven years.
STORE EXPENSES
The direct costs incurred in operating the Company's stores have been
classified as store expenses. Store expenses include salary and benefit
expense of store employees, rent and other occupancy costs, depreciation of
properties and equipment, bank charges, armored security costs, net returned
checks, cash shortages, and other costs incurred by the stores. Excluded from
store operations are the corporate expenses of the Company which include
salaries and benefits of corporate employees.
INCOME TAXES
The Company has elected to be taxed as an "S" corporation as defined in the
Internal Revenue Code. Taxable income for the Company is included in the
respective shareholders' personal income tax returns. Accordingly, no federal
income taxes are provided for the Company. The provision for state income
taxes was $9,000 and $20,000 for the years ended December 31, 1994 and 1995,
respectively, and $20,000 and $26,000 for the nine months ended September 30,
1995 and 1996, respectively.
ADVERTISING COSTS
The Company expenses advertising costs as incurred. Advertising costs
charged to expense were $52,000 and $23,000 for the years ended 1994 and 1995,
respectively, and $17,000 for the nine months ended September 30, 1995 and
1996.
CASH AND CASH EQUIVALENTS
Short-term investments in highly liquid investments are included in cash and
cash equivalents.
TREASURY STOCK
The purchase of the Company's common stock is recorded at cost.
F-48
<PAGE>
CASH-N-DASH CHECK CASHING, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(UNAUDITED WITH RESPECT TO SEPTEMBER 30, 1995 AND 1996)
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
UNAUDITED INTERIM FINANCIAL STATEMENTS
The Company, in its opinion, has included all adjustments (consisting only
of normal recurring accruals) necessary for a fair presentation of its
financial position at September 30, 1996 and the results of its operations for
the nine months ended September 30, 1995 and 1996. The results for the nine
months ended September 30, 1996 are not necessarily indicative of the results
for the full year.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying values of cash equivalents and notes payable approximate their
fair values due to the short-term maturities of the financial instruments.
3. PROPERTIES AND EQUIPMENT
Properties and equipment at December 31, 1994 and 1995 and September 30,
1996 consist of the following (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
------------- SEPTEMBER 30,
1994 1995 1996
------ ------ -------------
<S> <C> <C> <C>
Leasehold improvements......................... $ 355 $ 274 $ 274
Equipment and furniture........................ 847 874 875
------ ------ -----
1,202 1,148 1,149
Less accumulated depreciation.................. 609 746 845
------ ------ -----
Total office properties and equipment.......... $ 593 $ 402 $ 304
====== ====== =====
</TABLE>
4. NOTES PAYABLE
The Company has notes payable to shareholders which are payable upon demand
and which bear interest at rates ranging from 9% to 12% in 1994 and 1995. The
aggregate outstanding balance of these notes was $615,000 at December 31, 1994
and $415,000 at December 31, 1995 and September 30, 1996. Additionally, the
Company has other notes payable, which are also payable upon demand and bear
interest at rates ranging from 8% to 12%. The aggregate outstanding balance of
these notes was $179,000 at December 31, 1994 and $129,000 at December 31,
1995 and September 30, 1996.
Interest of $88,000 and $95,000 was paid during the years ended December 31,
1994 and 1995, respectively and $70,000 and $43,000 for the nine months ended
September 30, 1995 and 1996, respectively.
The Company has a $300,000 line of credit which bears interest of prime plus
1%. The Company had no amounts outstanding on this line of credit at December
31, 1995 or September 30, 1996. The Company's current line of credit agreement
expires March 5, 1997.
5. COMMITMENTS
The Company occupies office and retail space under operating lease
arrangements. Rent expense amounted to $398,000 and $466,000 for the years
ended December 31, 1994 and 1995, respectively, $332,000 and $387,000 for the
nine months ended September 30, 1995 and 1996, respectively. Most leases
contain standard renewal clauses.
F-49
<PAGE>
CASH-N-DASH CHECK CASHING, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(UNAUDITED WITH RESPECT TO SEPTEMBER 30, 1995 AND 1996)
5. COMMITMENTS (CONTINUED)
Minimum obligations under noncancelable operating leases for the year ended
December 31 are as follows (in thousands):
<TABLE>
<CAPTION>
YEAR AMOUNT
---- ------
<S> <C>
1996.................................. $ 484
1997.................................. 347
1998.................................. 126
1999.................................. 56
2000.................................. 4
------
$1,017
======
</TABLE>
6. CONTRACTS
The Company has food stamp contracts with various counties for the
distribution of food stamps. The revenue related to each contract and its
expiration date are summarized as follows:
<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
------------ ------------- CONTRACT
1994 1995 1995 1996 EXPIRES
----- ------ ------ ------ --------
(In Thousands)
<S> <C> <C> <C> <C> <C>
Kern County........................ $ -- $ 776 510 556 12/31/99
Kings County....................... 64 74 49 54 12/31/97
Madera County...................... 58 70 48 54 6/30/02
Merced County...................... 136 347 259 266 6/30/98
Stanislaus County.................. 206 222 171 170 12/31/96
Tulare County...................... 264 357 232 302 6/30/99
Tuolumne County.................... -- 52 37 40 12/31/00
----- ------ ------ ------
$ 728 $1,898 $1,306 $1,442
===== ====== ====== ======
</TABLE>
The Company's contract with Stanislaus County, which expires December 31,
1996, is currently under negotiation for renewal. There is no assurance that
the contract will be renewed, or if renewed, the terms will be substantially
the same as the current contract.
7. RELATED PARTY TRANSACTIONS
As discussed in Note 4, the Company had promissory notes to shareholders in
the amount of $615,000 and $415,000 at December 31, 1994 and 1995,
respectively. Interest of $67,000 and $69,000 was paid on these notes for the
years ended December 31, 1994 and 1995, respectively and $52,000 and $34,000
for the nine months ended September 30, 1995 and 1996, respectively.
The Company had a note receivable from an officer in the amount of $92,000
at December 31, 1994. This note was repaid in 1995. Interest of $12,000 and
$1,000 was paid on this note in 1994 and 1995, respectively.
8. CREDIT RISK
At December 31, 1994 and 1995 and September 30, 1996, the Company had seven,
six and one bank account, respectively, in financial institutions in the
aggregate amount of $21,000, $25,000 and $133,000, respectively, which
exceeded Federal Deposit Insurance Corporation limits. Management believes
credit risk relating to these deposits is minimal.
9. SUBSEQUENT EVENT
On October 22, 1996, the Company entered into an agreement to sell
substantially all of the assets of the Company. The sale is expected to be
completed in the last quarter of 1996. The aggregate sale price will be
approximately $7,250,000.
F-50
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIR-
CUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AF-
FAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECU-
RITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECU-
RITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary....................................................... 1
Risk Factors............................................................. 13
Capitalization........................................................... 20
Selected Historical Financial Data....................................... 21
Unaudited Condensed Combined Pro Forma Financial Statements.............. 24
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 31
Business................................................................. 39
Management............................................................... 53
Principal Shareholders................................................... 57
Certain Relationships and Related Transactions........................... 58
The Exchange Offer....................................................... 59
Description of Notes..................................................... 66
Description of Certain Other Indebtedness................................ 86
Certain U.S. Federal Income Tax Consequences............................. 88
Plan of Distribution..................................................... 92
Legal Matters............................................................ 92
Experts.................................................................. 92
Index to Financial Statements............................................ F-1
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
$110,000,000
DOLLAR FINANCIAL GROUP, INC.
10 7/8% SERIES A SENIOR NOTES
DUE 2006
------------------
PROSPECTUS
------------------
, 199
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Dollar Financial Group, Inc. (the "Company") is a New York corporation.
Section 722 of the New York Business Corporation Law, as amended, empowers a
corporation, within certain limitations, to indemnify any person who served in
any capacity at the request of the corporation, by reason of the fact that he,
his testator or intestate was a director or officer of the corporation, or
served such other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise in any capacity, against judgements, fees,
amounts paid in settlement and reasonable expenses, including attorneys' fees
actually and necessarily incurred as a result of such action or proceeding, or
any appeal therein, if such director or officer acted, in good faith, for a
purpose which he reasonably believed to be in, or in the case of service for
any other corporation or any partnership, joint venture, trust, employee
benefit plan or other enterprise, not opposed to, the best interests of the
corporation and, in criminal actions or proceedings, in addition, had no
reasonable cause to believe that his conduct was unlawful.
There are no provisions for the indemnification of directors or officers in
the Certificate of Incorporation or Bylaws of the Company.
ITEM 21. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES.
(a) EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF DOCUMENT
----------- -----------------------
<C> <S>
3.1 (a)(i) Certificate of Incorporation of Dollar Financial Group, Inc.
(a)(ii) Certificate of Change of Dollar Financial Group, Inc.
(a)(iii) Certificate of Change of Certificate of Incorporation of Dollar
Financial Group, Inc.
(a)(iv) Certificate of Amendment of the Certificate of Incorporation of
Dollar Financial Group, Inc.
(b)(i) Articles of Incorporation of Albuquerque Investments, Inc.
Articles of Incorporation of Any Kind Check Cashing Centers,
(c)(i) Inc.
(c)(ii) Articles of Amendment of Articles of Incorporation of Any Kind
Check Cashing Centers, Inc.
(d)(i) Articles of Incorporation of Check Mart of Louisiana, Inc.
(e)(i) Certificate of Incorporation of Check Mart of New Jersey, Inc.
(f)(i) Articles of Incorporation of Check Mart of New Mexico, Inc.
(f)(ii) Articles of Amendment to the Articles of Incorporation of Check
Mart of New Mexico, Inc.
(g)(i) Articles of Incorporation of Check Mart of Pennsylvania, Inc.
(h)(i) Articles of Incorporation of Check Mart of Texas, Inc.
(i)(i) Articles of Incorporation of Check Mart of Utah, Inc.
(i)(ii) Articles of Amendment to the Articles of Incorporation of Check
Mart of Utah, Inc.
(j)(i) Articles of Incorporation of Check Mart of Washington, Inc.
(j)(ii) Articles of Amendment of Check Mart of Washington, Inc.
(k)(i) Articles of Incorporation of Check Mart of Washington, D.C.,
Inc.
(l)(i) Articles of Incorporation of Check Mart of Wisconsin, Inc.
(m)(i) Certificate of Incorporation of DFG Warehousing Co., Inc.
(n)(i) Articles of Incorporation of Dollar Financial Insurance Corp.
(o)(i) Certificate of Incorporation of Dollar Insurance Administration
Corp.
(p)(i) Articles of Incorporation of Financial Exchange Company of
Michigan, Inc.
(p)(ii) Certificate of Amendment to the Articles of Incorporation of
Financial Exchange Company of Michigan, Inc.
(q)(i) Articles of Incorporation of Financial Exchange Company of Ohio,
Inc.
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF DOCUMENT
----------- -----------------------
<C> <S>
(q)(ii) Certificate of Amendment by Incorporator.
(q)(iii) Certificate of Amendment (by Shareholders).
(r)(i) Certificate of Incorporation of Financial Exchange Company of
Pennsylvania, Inc.
(r)(ii) Amendment "1" to Certificate of Incorporation of Financial
Exchange Company of Pennsylvania, Inc.
(r)(iii) Amendment "2" to Certificate of Incorporation of Financial
Exchange Company of Pennsylvania, Inc.
(s)(i) Certificate of Incorporation of Financial Exchange Company of
Pittsburgh, Inc.
(t)(i) Certificate of Incorporation of Financial Exchange Company of
Virginia, Inc.
(u)(i) Articles of Incorporation of L.M.S. Development Corporation
(v)(i) Articles of Incorporation of Monetary Management Corp.
(w)(i) Certificate of Incorporation of Monetary Management Corporation
of Pennsylvania, Inc.**
(x)(i) Articles of Incorporation of Monetary Management of California,
Inc.
(y)(i) Articles of Incorporation of Monetary Management of Maryland,
Inc.
(z)(i) Certificate of Incorporation of Monetary Management of New
York, Inc.
(aa)(i) Articles of Incorporation of Pacific Ring Enterprises, Inc.
(bb)(i) Limited Partnership Certificate and Agreement of U.S. Check
Exchange Limited Partnership
(bb)(ii) First Amendment to Certificate and Agreement of Limited
Partnership of U.S. Check Exchange Limited Partnership
(bb)(iii) Second Amendment Certificate of Limited Partnership
3.2 (a)(i) Bylaws of Dollar Financial Group, Inc.
(b)(i) Bylaws of Albuquerque Investments, Inc.
(c)(i) Bylaws of Any Kind Check Cashing Centers, Inc.
(d)(i) Bylaws of Check Mart of Louisiana, Inc.
(e)(i) Bylaws of Check Mart of New Jersey, Inc.
(f)(i) Bylaws of Check Mart of New Mexico, Inc.
(g)(i) Bylaws of Check Mart of Pennsylvania, Inc.
(h)(i) Bylaws of Check Mart of Texas, Inc.
(i)(i) Bylaws of Check Mart of Utah, Inc.
(j)(i) Bylaws of Check Mart of Washington, Inc.
(k)(i) Bylaws of Check Mart of Washington, D.C., Inc.
(l)(i) Bylaws of Check Mart of Wisconsin, Inc.
(m)(i) Bylaws of DFG Warehousing Co., Inc.
(n)(i) Bylaws of Dollar Financial Insurance Corp.
(o)(i) Bylaws of Dollar Insurance Administration Corp.
(p)(i) Bylaws of Financial Exchange Company of Michigan, Inc.
(q)(i) Code of Regulations of Financial Exchange Company of Ohio, Inc.
(r)(i) Bylaws of Financial Exchange Company of Pennsylvania, Inc.
(s)(i) Bylaws of Financial Exchange Company of Pittsburgh, Inc.
(t)(i) Bylaws of Financial Exchange Company of Virginia, Inc.
(u)(i) Bylaws of L.M.S. Development Corporation
(v)(i) Bylaws of Monetary Management Corp.
(w)(i) Bylaws of Monetary Management Corporation of Pennsylvania, Inc.
(x)(i) Bylaws of Monetary Management of California, Inc.
(y)(i) Bylaws of Monetary Management of Maryland, Inc.
(z)(i) Bylaws of Monetary Management of New York, Inc.
(aa)(i) Bylaws of Pacific Ring Enterprises, Inc.**
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF DOCUMENT
----------- -----------------------
<C> <S>
4.1 Indenture, dated as of November 15, 1996, among the Company, the
Guarantors and Fleet National Bank, as Trustee.
4.2 Form of Notes (included in Exhibit 4.1).
4.3 A/B Exchange Registration Rights Agreement, dated as of November
15, 1996, by and among the Company, the Guarantors and the
Initial Purchasers.
5.1 Opinion of Weil, Gotshal & Manges LLP regarding legality.**
8.1 Opinion of Weil, Gotshal & Manges LLP regarding tax matters.**
10.1 (a) Asset Purchase Agreement, dated January 9, 1995, by and among
the Company, Happy's Check Cashing and Adrian Rubin.
(b) Amendment No. 1 to the Asset Purchase Agreement, dated February
20, 1995, by and among the Company, Happy's Check Cashing,
Chase Money Loan, Inc. and Adrian Rubin.
10.2 Purchase Agreement, dated July 28, 1995, by and among Monetary
Management Corporation, NCCI Corporation, Larry M. Senderhauf,
E. Rick Safford and Fred T. Kampo, Jr.
10.3 (a) Site License and Services Agreement, dated April 30, 1996, by
and between the Company and The Southland Corporation.**
(b) Asset Purchase Agreement, dated April 30, 1996, by and between
the Company and The Southland Corporation.**
10.4 Employment Agreement, dated as of August 8, 1996, between the
Company, DFG Holdings, Inc. and Jeffrey Weiss.**
10.5 Employment Agreement, dated as of August 8, 1996, between the
Company, DFG Holdings, Inc. and Donald F. Gayhardt.**
10.6 Amended and Restated Shareholders Agreement, dated August 8,
1996, among WPG Corporate Development Associates IV, L.P., WPG
Corporate Development Associates IV (Overseas), L.P., the
individual fund shareholders signatory thereto, the GHB
Charitable Trust #1, Jeffrey Weiss, Donald F. Gayhardt, Pegasus
Partners L.P., PAG Dollar Investors, the warrant holders
signatory thereto, General Electric Capital Corporation and DFG
Holdings, Inc. **
10.7 Purchase Agreement, dated as of August 8, 1996, by and among the
Company, DFG Holdings, Inc., Any Kind Check Cashing Centers,
Inc., the shareholders signatory thereto, U.S. Check Exchange
Limited Partnership, the limited partners signatory thereto and
George H. Brimhall.
10.8 Asset Purchase Agreement, dated August 28, 1996, by and among
Financial Exchange Company of Ohio, Inc., ABC Check Cashing,
Inc. and the shareholder signatory thereto.**
10.9 Asset Purchase Agreement, dated as of October 22, 1996, by and
among the Company, Cash-N-Dash Check Cashing, Inc. and the
shareholders signatory thereto.**
10.10 Stock Purchase Agreement, dated as of October 22, 1996, by and
among the Company, Manor Investment Co., Inc. and the
shareholders signatory thereto.**
10.11 Amended and Restated Purchase Agreement, dated as of October 23,
1996, by and among Dollar Financial Canada Ltd., DFG Holdings,
Inc., National Money Mart, Inc. and the shareholders signatory
thereto.
10.12 Second Amended and Restated Credit Agreement, dated as of
November 15, 1996, among the Company, certain commercial
lending institutions, Lehman Commercial Paper, Inc. and Bank of
America National Trust and Savings Association.**
12.1 Computation of Ratio of Earnings to Fixed Charges.
21.1 Subsidiaries of the Registrants.**
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF DOCUMENT
----------- -----------------------
<C> <S>
23.1 Consent of Weil, Gotshal & Manges LLP (included in Exhibits 5.1
and 8.1).**
23.2 Consent of Ernst & Young LLP.
23.3 Consent of McGladrey & Pullen, LLP.
23.4 Consent of Ernst & Young Chartered Accountants.
24.1 Power of Attorney (included in signature pages to Registration
Statement).
25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act
of 1939, as amended, of Fleet National Bank, as Trustee under
the Indenture.**
27.1 Financial Data Schedule for the fiscal year ended June 30, 1996,
which is being submitted electronically to the Securities and
Exchange Commission for information purposes only.
27.2 Financial Data Schedule for the fiscal quarter ended September
30, 1996, which is being submitted electronically to the
Securities and Exchange Commission for information purposes
only.
99.1 Form of Letter of Transmittal.**
99.2 Form of Notice of Guaranteed Delivery.**
99.3 Form of Exchange Agent Agreement, between the Company and Fleet
National Bank.**
</TABLE>
--------
** To be filed by amendment.
(b) FINANCIAL STATEMENT SCHEDULES
<TABLE>
<CAPTION>
SCHEDULE NUMBER DESCRIPTION
--------------- -----------
<C> <S>
</TABLE>
ITEM 22. UNDERTAKINGS
(a) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the act and
will be governed by the final adjudication of such issue.
(b) The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the Prospectus pursuant to
Items 4, 10(b), 11 or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the Registration Statement through
the date of responding to the request.
(c) The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the Registration Statement when it became effective.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrants named below have duly caused this Registration Statement to be
signed on their behalf by the undersigned, thereunto duly authorized, in the
City of Berwyn, Commonwealth of Pennsylvania on December 19, 1996.
Dollar Financial Group, Inc.
/s/ Donald F. Gayhardt
By: _________________________________
Donald F. Gayhardt
Executive Vice President, Chief
Financial Officer, Secretary and
Treasurer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears
below hereby constitutes and appoints Jeffrey A. Weiss and Donald F. Gayhardt,
and each of them singly, his or her true and lawful attorney-in-fact and agent,
and each with full power of substitution and resubstitution (until revoked in
writing) to sign for such person and in such person's name and capacity
indicated below, any and all amendments to this Registration Statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming such person's signature as it may be signed by said attorneys to any
and all amendments.
DOLLAR FINANCIAL GROUP, INC.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Jeffrey A. Weiss Chairman of the December 19, 1996
- ------------------------------------- Board of Directors,
JEFFREY A. WEISS President and Chief
Executive Officer
(principal
executive officer)
/s/ Donald F. Gayhardt Executive Vice December 19, 1996
- ------------------------------------- President, Chief
DONALD F. GAYHARDT Financial Officer,
Secretary,
Treasurer and
Director (principal
financial and
accounting officer)
</TABLE>
II-5
<PAGE>
ALBUQUERQUE INVESTMENTS, INC.
ANY KIND CHECK CASHING CENTERS, INC.
CHECK MART OF NEW MEXICO, INC.
FINANCIAL EXCHANGE COMPANY OF MICHIGAN, INC.
FINANCIAL EXCHANGE COMPANY OF OHIO, INC.
FINANCIAL EXCHANGE COMPANY OF PENNSYLVANIA, INC.
FINANCIAL EXCHANGE COMPANY OF PITTSBURGH, INC.
FINANCIAL EXCHANGE COMPANY OF VIRGINIA, INC.
MONETARY MANAGEMENT OF CALIFORNIA, INC.
MONETARY MANAGEMENT CORPORATION OF PENNSYLVANIA, INC.
MONETARY MANAGEMENT OF NEW YORK, INC.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Jeffrey A. Weiss Chairman of the December 19, 1996
- ------------------------------------- Board of Directors,
JEFFREY A. WEISS Chief Executive
Officer and
President
(principal
executive officer)
/s/ Donald F. Gayhardt Executive Vice December 19, 1996
- ------------------------------------- President, Chief
DONALD F. GAYHARDT Financial Officer,
Secretary,
Treasurer and
Director (principal
financial and
accounting officer)
</TABLE>
II-6
<PAGE>
CHECK MART OF LOUISIANA, INC.
CHECK MART OF NEW JERSEY, INC.
CHECK MART OF PENNSYLVANIA, INC.
CHECK MART OF TEXAS, INC.
CHECK MART OF WASHINGTON, D.C., INC.
MONETARY MANAGEMENT OF MARYLAND, INC.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Jeffrey A. Weiss Chairman of the December 19, 1996
- ------------------------------------- Board of Directors,
JEFFREY A. WEISS Chief Executive
Officer and
President
(principal
executive officer)
/s/ Donald F. Gayhardt Executive Vice December 19, 1996
- ------------------------------------- President, Chief
DONALD F. GAYHARDT Financial Officer,
Treasurer and
Director (principal
financial and
accounting officer)
</TABLE>
CHECK MART OF UTAH, INC.
CHECK MART OF WASHINGTON, INC.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Jeffrey A. Weiss Chairman of the December 19, 1996
- ------------------------------------- Board of Directors
JEFFREY A. WEISS and President
(principal
executive officer)
/s/ Donald F. Gayhardt Secretary and December 19, 1996
- ------------------------------------- Director (principal
DONALD F. GAYHARDT financial and
accounting officer)
</TABLE>
II-7
<PAGE>
CHECK MART OF WISCONSIN, INC.
L.M.S. DEVELOPMENT CORPORATION
PACIFIC RING ENTERPRISES
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Jeffrey A. Weiss Chairman of the December 19, 1996
- ------------------------------------- Board of Directors
JEFFREY A. WEISS and President
(principal
executive officer)
/s/ Donald F. Gayhardt Executive Vice December 19, 1996
- ------------------------------------- President,
DONALD F. GAYHARDT Secretary,
Treasurer and
Director (principal
financial and
accounting officer)
</TABLE>
DFG WAREHOUSING CO., INC.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Jeffrey A. Weiss President and Chief December 19, 1996
- ------------------------------------- Executive Officer
JEFFREY A. WEISS (principal
executive officer)
/s/ Donald F. Gayhardt Executive Vice December 19, 1996
- ------------------------------------- President, Chief
DONALD F. GAYHARDT Financial Officer,
Secretary,
Treasurer and
Director (principal
financial and
accounting officer)
</TABLE>
II-8
<PAGE>
DOLLAR FINANCIAL INSURANCE CORP.
DOLLAR INSURANCE ADMINISTRATION CORP.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Jeffrey A. Weiss Chairman of the December 19, 1996
- ------------------------------------- Board of Directors
JEFFREY A. WEISS and President
(principal
executive officer)
/s/ Donald F. Gayhardt Executive Vice December 19, 1996
- ------------------------------------- President,
DONALD F. GAYHARDT Secretary,
Treasurer and
Director (principal
financial and
accounting officer)
</TABLE>
MONETARY MANAGEMENT CORP.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Jeffrey A. Weiss Chairman of the December 19, 1996
- ------------------------------------- Board of Directors
JEFFREY A. WEISS and Vice President
(principal
executive officer)
/s/ Donald F. Gayhardt Secretary and December 19, 1996
- ------------------------------------- Director (principal
DONALD F. GAYHARDT financial and
accounting officer)
</TABLE>
U.S. CHECK EXCHANGE LIMITED PARTNERSHIP
BY: ANY KIND CHECK CASHING CENTERS, INC. AS GENERAL PARTNER
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Jeffrey A. Weiss Chairman of the December 19, 1996
- ------------------------------------- Board of Directors,
JEFFREY A. WEISS Chief Executive
Officer and
President
(principal
executive officer)
/s/ Donald F. Gayhardt Executive Vice December 19, 1996
- ------------------------------------- President, Chief
DONALD F. GAYHARDT Financial Officer,
Secretary,
Treasurer and
Director (principal
financial and
accounting officer)
</TABLE>
II-9
Exhibit 3.1(a)(i)
<PAGE>
CERTIFICATE OF INCORPORATION
OF
MONETARY MANAGEMENT CORPORATION
UNDER SECTION 402 OF THE
BUSINESS CORPORATION LAW
* * * * *
WE, THE UNDERSIGNED, all of the age of eighteen years or
over, for the purpose of forming a corporation pursuant to Section 402
of the Business Corporation Law of New York, do hereby certify:
FIRST: The name of the corporation is
MONETARY MANAGEMENT CORPORATION
SECOND: The purposes for which it is formed are:
To devise, install and operate financial, checking,
correspondence, filing and other office and business systems for
others; to advise and assist others in all matters relating to the
management, financing and operations of their businesses; to manage
and supervise, and to provide management and supervision for, all or
part of any and every kind of business enterprise; and to do all such
things and perform or supply all such services as are commonly done,
performed or supplied by business management experts.
<PAGE>
THIRD: The office of the corporation is to be located in
the City of New York, County of New York, State of New York.
FOURTH: The aggregate number of shares which the
corporation shall have authority to issue is twenty thousand (20,000)
of the par value of One Dollar ($1.00) each.
FIFTH: The Secretary of State is designated as the agent of
the corporation upon whom process against the corporation may be
served. The post office address to which the Secretary of State shall
mail a copy of any process against the corporation served upon him is:
c/o C T Corporation System, 277 Park Avenue, New York, New York 10017.
SIXTH: The name and address of the registered agent which
is to be the agent of the corporation upon whom process against it may
be served, are C T CORPORATION SYSTEM, 277 Park Avenue, New York, New
York 10017.
<PAGE>
IN WITNESS WHEREOF, we have made and signed this certificate
this 25th day of September, A.D. 1979, and we affirm the statements
contained therein as true under penalties of perjury.
/s/ Patrick Cavanagh
----------------------------------------
Patrick Cavanagh
277 Park Avenue,
New York, NY 10017
/s/ Joseph Mirrione
----------------------------------------
Joseph Mirrione
277 Park Avenue,
New York, NY 10017
NYFS06...:\47\41847\0008\1710\TABD116K.160
Exhibit 3.1(a)(ii)
<PAGE>
CERTIFICATE OF CHANGE
OF
MONETARY MANAGEMENT CORPORATION
UNDER SECTION 805-A OF THE BUSINESS CORPORATION LAW
WE, THE UNDERSIGNED, Gene LoBell and Howard Topol Roberts,
being respectively the President and the Secretary of Monetary
Management Corporation, hereby certify:
1. The name of the corporation is Monetary Management
Corporation.
2. The Certificate of Incorporation of said corporation
was filed by the Department of State on September 28, 1979.
3. The following was authorized by the Board of Directors:
To change the post office address to which the
Secretary of State shall mail a copy of process in any action or
proceeding against the corporation which may be served on him from c/o
C T Corporation System, 1633 Broadway, New York, N.Y. 10019 to 345
Hudson Street, New York, N.Y. 10014.
To revoke the designation of C T CORPORATION SYSTEM,
1633 Broadway, New York, N.Y. 10019 as its registered agent in New
York upon whom all process against the corporation may be served.
<PAGE>
IN WITNESS WHEREOF, we have signed this certificate on the
10th day of November, 1981 and we affirm the statements contained therein
as true under penalties of perjury.
/s/ Gene Lobell
-----------------------------------------
Gene LoBell, President
/s/ Howard Topol Roberts
-----------------------------------------
Howard Topol Roberts, Secretary
NYFS06...:\47\41847\0008\1710\TABD116K.160
Exhibit 3.1(a)(iii)
<PAGE>
CERTIFICATE OF CHANGE
OF
CERTIFICATE OF INCORPORATION
OF
MONETARY MANAGEMENT CORPORATION
Under Section 805-A of the Business Corporation Law
---ooo0ooo---
WE, THE UNDERSIGNED, Jeffrey Weiss and Donald Gayhardt
being, respectively, the President and the Secretary of MONETARY
MANAGEMENT CORPORATION, (the "Corporation"), hereby certify:
1. The name of the Corporation is Monetary Management
Corporation;
2. The Certificate of Incorporation of the
Corporation was filed by the Department of State on
September 28, 1979; and
3. The following was authorized by the Board of
Directors:
To change the registered agent in New York upon
whom all process against the Corporation may be
served from CT Corporation, 277 Park Ave New York,
New York 10017 to CT Corporation System located at
1633 Broadway, New York, New York 10019
<PAGE>
IN WITNESS WHEREOF, we have signed this certificate on the
22nd day of August, 1995 and we affirm the statements contained therein as
true under penalties of perjury.
/s/ Jeffrey Weiss
----------------------------------------
Jeffrey Weiss, President
/s/ Donald Gayhardt
----------------------------------------
Donald Gayhardt, Secretary
NYFS06...:\47\41847\0008\1710\TABD116K.160
Exhibit 3.1(a)(iv)
<PAGE>
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
MONETARY MANAGEMENT CORPORATION
Under Section 805 of the Business Corporation Law
---ooo0ooo---
THE UNDERSIGNED, Jeffrey Weiss and Donald Gayhardt being,
respectively, the President and the Secretary of MONETARY MANAGEMENT
CORPORATION (the "Corporation"), hereby certify:
1. The name of the Corporation is Monetary Management
Corporation;
2. The Certificate of Incorporation of the Corporation was
filed by the Department of State on September 28, 1979 and
amended on November 25, 1981.
3. Paragraph First, relating to the name of the
Corporation is hereby amended to read in its entirety:
The Name of the Corporation is DOLLAR FINANCIAL GROUP, INC.
4. Pursuant to Section 803 of the Business Corporation Law,
this Amendment to the Certificate of Incorporation was authorized by
written consent of the Board of Directors and written consent of the
sole shareholder of the Corporation.
<PAGE>
IN WITNESS WHEREOF, we have signed this certificate on the
18th day of January, 1996 and hereby affirm under penalties of perjury,
that the statements contained herein are true and correct.
/s/ Jeffrey Weiss
----------------------------------------
Jeffrey Weiss, President
/s/ Donald Gayhardt
----------------------------------------
Donald Gayhardt, Secretary
NYFS06...:\47\41847\0008\1710\TABD116K.160
Exhibit 3.1(b)(i)
<PAGE>
STATE OF NEW MEXICO
[SEAL]
OFFICE OF
THE STATE CORPORATION COMMISSION
CERTIFICATE OF INCORPORATION
OF
ALBUQUERQUE INVESTMENTS, INC.
1497213
The State Corporation Commission certifies that duplicate
originals of the Articles of Incorporation attached hereto, duly
signed and verified pursuant to the provisions of the BUSINESS
Corporation Act, have been received by it and are found to conform to
law.
Accordingly, by virtue of the authority vested in it by law, the
State Corporation Commission issues this Certificate of Incorporation
and attaches hereto a duplicate original of the Articles of
Incorporation.
Dated: OCTOBER 5, 1990
In Testimony Whereof, the State
Corporation Commission of the State
of New Mexico has caused this
certificate to be signed by its
Chairman and the Seal of said
Commission to be affixed at the City
[SEAL] of Santa Fe
[signature illegible]
------------------------------------
Chairman
[signature illegible]
------------------------------------
Director
NYFS06...:\47\41847\0008\1710\TABD116P.370
<PAGE>
ARTICLES OF INCORPORATION
OF
ALBUQUERQUE INVESTMENTS, INC.
-----------------------------
The undersigned, for the purpose of forming a corporation
under the New Mexico Business Corporation Act, hereby certifies:
ARTICLE I
The name of the corporation shall be: Albuquerque
Investments, Inc.
ARTICLE II
The period of duration of the corporation shall be
perpetual.
ARTICLE III
The purposes for which the corporation is organized are as
follows:
A. To act as a partner in and otherwise operate a check
cashing and money transfer business and other related activities.
B. To engage in any lawful business permitted of a private
corporation under the laws of the State of New Mexico and to have all
of the corporate powers enumerated in the New Mexico Business
Corporation Act.
C. To do all things necessary and convenient for the
accomplishment or furtherance of any of the purposes stated
<PAGE>
herein, and to do all things necessary or convenient to the protection
and benefit of the corporation.
ARTICLE IV
The corporation shall have authority to issue Five Hundred
Thousand (500,000) shares of common stock with a par value of One
Dollar ($1.00) per share. The corporation shall initially have only
one class of stock, which shall be common stock. The Board of
Directors shall have authority to divide any or all of such class of
stock into series and, within the limitations of the Business
Corporation Act, may fix and determine the relative rights and
preferences of the shares of any series so established.
ARTICLE V
Cumulative voting does not exist with respect to shares of
stock. A shareholder of this corporation shall, because of his
ownership of stock, have a preemptive right to purchase, subscribe
for, or take any part of any stock or any part of the notes,
debentures, bonds, or other securities convertible into or carrying
options or warrants to purchase stock of this corporation issued,
optioned, or sold by it after its incorporation. Any part of the
capital stock and any part of the notes, debentures, bonds or other
securities convertible into or carrying options or warrants to
purchase stock of this corporation may be issued, optioned for sale,
and sold or
<PAGE>
disposed of by this corporation pursuant to a resolution of its Board
of Directors to such persons and upon such terms, as may to such Board
seem proper only after first offering such stock or securities or any
part thereof to existing shareholders.
ARTICLE VI
The address of the corporation's initial registered office
is 20 First Plaza, Suite 213, Albuquerque, New Mexico 87102, and the
name of the corporation's initial registered agent at such address is
Elizabeth Mason.
ARTICLE VII
The business of the corporation shall be managed by a Board
of Directors consisting of such number as may be provided by the By-
Laws. The initial Board of Directors shall consist of one (1) member.
The name and address of the person who is to serve as director until
the first annual meeting of shareholders or until successors are
elected and qualified are:
Brent Therrien
4521 Central NE
Albuquerque, NM 87108
ARTICLE VIII
The Board of Directors, except as limited by the New Mexico
Business Corporation Act and these Articles of Incorporation, shall
have the right to make, adopt, alter, amend and repeal By-Laws, to fix
and alter the number of directors, and to provide for the management
of the corporation's property and
<PAGE>
the regulation and government of its business and affairs subject to
the right of any shareholders owning ten percent (10%) of the capital
stock of the corporation, issued and outstanding, to call a special
meeting of the shareholders for the purpose of making, adopting,
altering, amending and repealing such By-Laws, and all By-Laws adopted
by the shareholders shall supersede By-Laws made and adopted by the
Board of Directors in conflict therewith.
ARTICLE IX
In addition to any other powers provided by law or by these
Articles of Incorporation, the corporation shall have the power to
identify to the fullest extent provided by the New Mexico Business
Corporation Act any past or present director, officer, employee or
agent of the corporation who is made a party in any proceeding.
ARTICLE X
The corporation may enter into contracts or transact
business with one or more of its directors, officers, or shareholders,
or with any corporation, association, trust company, organization, or
other concern in which any one of more of its directors, officers, or
shareholders are directors, officers, trustees, beneficiaries, or
shareholders, or otherwise interested in other contracts or
transactions in which any one or more of its directors, officers, or
shareholders is in any way interested; and, in the absence of fraud,
no such contract or
<PAGE>
transaction shall be invalidated or in any affected by the fact that
such directors, officers, or shareholders of the corporation have, or
may have, interests which are, or might be, adverse to the interests
of the corporation, even though the vote or action of directors,
officers, or shareholders having such adverse interests may have been
necessary to obligate the corporation upon such contract or
transaction. At any meeting of the Board of Directors of the
corporation (or any duly authorized committee thereof) which shall
authorize or ratify any such contract or transaction, any such
director or directors may vote or act thereat with like force and
effect as if he had not such interest, provided in such case the
nature of such interest (though not necessarily the extent or details
thereof) shall be disclosed, or shall have been known to the directors
or a majority thereof. A general notice that a director or officer is
interested in any corporation or other concern of any kind above
referred to shall be sufficient disclosure as to such director or
officer with respect to all contracts and transactions with such
corporation or other concern. No director shall be disqualified from
holding office as a director or officer of the corporation by reason
of any such adverse interests. In the absence of fraud, no director,
officer, or shareholder having such adverse interest shall be liable
to the corporation or to any shareholder or creditor thereof, or to
any other person for any loss incurred
<PAGE>
by it under or by reason of such contract or transaction, nor shall
any such director, officer, or shareholder be accountable for any
gains or profits realized thereon.
ARTICLE XI
The officers, directors and other members of management of
this corporation shall be subject to the doctrine of corporate
opportunities only insofar as it applies to business opportunities in
which this corporation has expressed an interest as determined from
time to time by the corporation's Board of Directors as evidenced by
resolutions appearing in the corporation's minutes.
Once such areas of interest are delineated, all such
business opportunities within such areas of interest that come to the
attention of the officers, directors and other members of management
of the corporation shall be disclosed promptly to the corporation and
made available to it. The Board of Directors may reject any business
opportunity presented to it and, thereafter, any officer, director and
other member of management may avail himself of such opportunity.
Until such time as this corporation, through its Board of Directors,
has designated an area of interest, the officers, directors and other
members of management of this corporation shall be free to engage in
such areas of interest on their own and this doctrine shall not limit
the rights of any officer, director, or other member of
<PAGE>
management of this corporation to continue a business existing prior
to the time that such area of interest is designated by the
corporation. This provision shall not be construed to release any
employee of the corporation (other than an officer, director or member
of management) from any duties which he may have to the corporation.
ARTICLE XII
The name and address of the incorporator is: Elizabeth
Mason 20 First Plaza, Suite 213, Albuquerque, New Mexico 87102.
IN WITNESS WHEREOF, I have hereunto set my hand and seal
this 21 day of September, 1990.
/s/ Elizabeth Mason
-----------------------------------
ELIZABETH MASON
<PAGE>
AFFIDAVIT OF ACCEPTANCE OF
APPOINTMENT BY DESIGNATED REGISTERED AGENT
------------------------------------------
TO: Corporation Commission
State of New Mexico
Pursuant to the provisions of the New Mexico Business Corporation
Act, the undersigned hereby acknowledges her acceptance of appointment
as the initial registered agent of Albuquerque Investments, Inc.
Dated: September 21, 1990.
/s/ Elizabeth Mason
----------------------------------------
ELIZABETH MASON
STATE OF NEW MEXICO )
) ss.
COUNTY OF BERNALILLO )
I hereby certify that on this 21 day of September, 1990,
Elizabeth Mason personally appeared before me and, being first duly
sworn, declared that she signed the foregoing document and that the
statements contained therein are true.
/s/ Kelly E. Gomez
----------------------------------------
NOTARY PUBLIC
My commission expires:
7/2/94
-------------------------
NYFS06...:\47\41847\0008\1710\TABD116R.110
Exhibit 3.1(c)(i)
<PAGE>
ARTICLES OF INCORPORATION
OF
AMERICAN CHECK EXCHANGE, INC.
KNOW ALL MEN BY THESE PRESENTS:
That we, the undersigned, having associated ourselves
together for the purpose of forming a corporation under and by virtue
of the laws of the State of Arizona, do hereby adopt the following
original Articles of Incorporation:
ARTICLE I
The name of the corporation shall be AMERICAN CHECK
EXCHANGE, INC.
ARTICLE II
The names and addresses of each of the incorporators are as
follows:
David Michel 3400 E. Thomas Road
Phoenix, Arizona 85018
Karl Jeffrey Erhart 3300 N. Central, #1400
Phoenix, Arizona 85012
ARTICLE III
The purposes for which this corporation is organized include
the transaction of any and all lawful business for which a corporation
may be incorporated under the laws of the State of Arizona, as
presently existing or hereafter amended.
<PAGE>
The character of business which the corporation initially
intends actually to conduct in the State of Arizona is check cashing
and providing other financial services to customers.
ARTICLE IV
The aggregate authorized stock of the corporation shall be
1,000,000 shares of $0.25 par value.
ARTICLE V
The number of directors constituting its initial board of
directors is one. The name and address of the person who is to serve
as such director until the first annual meeting of the stockholders,
or until his successors have been elected and qualified, is:
David Michel 3400 E. Thomas Road
Phoenix, Arizona 85018
ARTICLE VI
This corporation does hereby appoint PAUL E. GILBERT, whose
address is 3300 North Central Avenue, Suite 1400, Phoenix, Arizona
85012, for its initial statutory agent in and for the State of
Arizona, for and on behalf of this corporation, to accept and
acknowledge service of and upon whom may be served all necessary
process or processes in any action, suit or proceeding that may be
brought against said corporation in any of the courts of the said
State of Arizona, such service of process or notice,
<PAGE>
and the acceptance thereof by said agent, to have the same effect as
if served upon the corporation.
IN WITNESS WHEREOF, we hereto affix our signatures this 2nd
day of November, 1982.
/s/ DAVID MICHEL
-----------------------------------
/s/ KARL JEFFREY ERHART
-----------------------------------
<PAGE>
STATE OF ARIZONA )
) ss.
County of Maricopa )
On this, the 2nd day of November, 1982, before me, the
undersigned Notary Public, personally appeared DAVID MICHEL, known to
me to be the person whose name is subscribed to the within instrument
and acknowledged that he executed the same for the purposes therein
contained.
IN WITNESS WHEREOF, I hereunto set my hand and official
seal.
[signature illegible]
-------------------------
Notary Public
My Commission Expires:
MARCH 17, 1983
-----------------------------------
<PAGE>
STATE OF ARIZONA )
) ss.
County of Maricopa )
On this, the 2nd day of November, 1982, before me, the
undersigned Notary Public, personally appeared KARL JEFFREY ERHART,
known to me to be the person whose name is subscribed to the within
instrument and acknowledged that he executed the same for the purposes
therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official
seal.
[signature illegible]
-------------------------
Notary Public
My Commission Expires:
MARCH 17, 1983
-------------------------
<PAGE>
November 2, 1982
Arizona Corporation Commission
P.O. Box 6019
Phoenix, AZ 85005
RE: American Check Exchange, Inc.
I, Paul E. Gilbert, having been designated to act as
Statutory Agent, hereby consent to act in that capacity until renewal
or resignation is submitted in accordance with the Arizona Revised
Statutes.
/s/ Paul E. Gilbert
-------------------------
Paul E. Gilbert
NYFS06...:\47\41847\0008\1710\ARTD116P.550
Exhibit 3.1(c)(ii)
<PAGE>
ARTICLES OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
AMERICAN CHECK EXCHANGE, INC.
Pursuant to Arizona Revised Statutes, Sections 10-059, 10-
061, and 10-062, AMERICAN CHECK EXCHANGE, INC. (the "Corporation"), an
Arizona corporation, hereby certifies that:
1. The present name of the Corporation is AMERICAN CHECK
EXCHANGE, INC.
2. The following Amendment to the Articles of
Incorporation of the Corporation has been duly adopted.
The present Article I has been deleted, and a new
Article I has been substituted which reads as follows:
"ARTICLE I
---------
The name of the Corporation is ANY KIND CHECK CASHING
CENTERS, INC. (the 'Corporation')."
3. The sole stockholder of the Corporation unanimously
adopted the foregoing Amendment on December 31, 1985.
4. There were four hundred (400) shares of the Corporation
outstanding and entitled to vote the foregoing Amendment.
<PAGE>
5. All of the outstanding shares of the Corporation were
voted in favor of the foregoing Amendment.
6. The foregoing Amendment does not provide for an
exchange, reclassification, or cancellation of issued shares.
7. The foregoing Amendment does not effect a change in the
amount of stated capital of the Corporation.
8. On December 31, 1985, the Board of Directors, by
written consent, unanimously adopted a resolution setting forth the
proposed Amendment and directing that it be submitted to the sole
stockholder.
<PAGE>
IN WITNESS WHEREOF, AMERICAN CHECK EXCHANGE, INC., has given
these Articles of Amendment to be signed and executed in its corporate
name by its President and attested by its Secretary on this 31 day of
December, 1985.
AMERICAN CHECK EXCHANGE, INC.
an Arizona corporation
By/s/ George Brimhall
----------------------------
George Brimhall, President
A T T E S T:
/s/ Leland J. Buttle
------------------------------
Leland J. Buttle, Secretary
<PAGE>
STATE OF ARIZONA )
) ss.
County of Maricopa )
I, the undersigned, a Notary Public in and for the
jurisdiction aforesaid, do certify that on December 31, 1985,
personally appeared GEORGE BRIMHALL and LELAND J. BUTTLE, President
and Secretary, respectively, of AMERICAN CHECK EXCHANGE, INC., an
Arizona corporation, and in the name of and on behalf of the
Corporation acknowledged the foregoing Articles of Amendment to be the
corporate act of the Corporation and who made oath in due form of law
that the matters set forth in these Articles of Amendment are true to
the best of their knowledge, information, and belief.
WITNESS MY HAND AND SEAL on the day and year first above
written.
[signature illegible]
-------------------------
Notary Public
My Commission Expires:
May 3, 1988
-----------------------------------
NYFS06...:\47\41847\0008\1710\ARTD116P.200
Exhibit 3.1(d)(i)
<PAGE>
ARTICLES OF INCORPORATION
OF
CHECK MART OF LOUISIANA, INC.
-----------------------------
The undersigned, being a natural person of the age of 18
years or older, does hereby act as incorporator for the purpose of
incorporating a business corporation under the Business Corporation
Law of the State of Louisiana.
FIRST: The name of the corporation (hereinafter called the
-----
"Corporation") is Check Mart of Louisiana, Inc.
SECOND: The name and address of the initial registered
------
office of the Corporation in the State of Louisiana is C T Corporation
System, 8550 United Plaza Boulevard, Baton Rouge, Louisiana 70809.
The registered office of the Corporation in the State of Louisiana
shall be deemed for venue and official publication purposes to be
located in East Baton Rouge Parish.
THIRD: The Corporation has as its purpose the engaging in
-----
any lawful act or activity for which corporations may be incorporated
under the Business Corporation Law of the State of Louisiana, as from
time to time amended or supplemented.
FOURTH: The aggregate number of shares that the Corporation
------
shall have authority to issue is 100, all of which shares shall be
Common Shares having a par value of $0.01 each.
FIFTH: The name and mailing address of the incorporator is
-----
John J.M. Selig, Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New
York, New York 10153.
SIXTH: In furtherance and not in limitation of the powers
-----
conferred by law, the board of directors of the Corporation is
expressly authorized to make, alter or repeal the By-laws of the
Corporation, but any By-laws adopted by the board of directors may be
amended or repealed by the stockholders entitled to vote thereon.
Election of directors need not be by written ballot.
SEVENTH: Notwithstanding any provisions in the By-laws to
-------
the contrary, each shareholder shall have one vote for each share
entitled to vote on matters to be decided by a vote of the
shareholders. There shall be no cumulative voting for the election of
directors.
<PAGE>
EIGHTH: A director shall not be personally liable to the
------
Corporation or its shareholders for damages for any breach of duty as
a director, except for any matter in respect of which such director
shall be liable by reason that, in addition to any and all other
requirements for such liability, there shall have been a judgment or
other final adjudication adverse to such director that establishes
that such director's acts or omissions were in bad faith or involved
intentional misconduct or a knowing violation of law or that such
director personally gained in fact a financial profit or other
advantage to which such director was not legally entitled. Neither
the amendment nor the repeal of this Article shall eliminate or reduce
the effect of this Article in respect to any matter occurring, or any
cause of action, suit or claim that, but for this Article, would
accrue or arise, prior to such amendment, repeal or adoption of an
inconsistent provision.
NINTH: The Corporation shall indemnify, to the fullest
-----
extent permitted by the Business Corporation Law of the State of
Louisiana, as the same may be amended or supplemented from time to
time, all persons whom it is permitted to indemnify pursuant thereto.
IN WITNESS WHEREOF, the undersigned has duly executed these
Articles of Incorporation on this 29th day of January, 1996.
State of New York )
) s.s.
County of New York )
Sworn and subscribed to
before me this 30th day of
January, 1996.
/s/ Georgia Beach
-------------------------
Notary Public
/s/ John J.M. Selig
--------------------
[SEAL] John J.M. Selig
Sole Incorporator
NYFS06...:\47\41847\0008\1710\ARTD126K.300
Exhibit 3.1(e)(i)
<PAGE>
CERTIFICATE OF INCORPORATION
OF
CHECK MART OF NEW JERSEY, INC.
------------------------------
The undersigned, being a natural person of the age of 18
years or older, does hereby act as incorporator for the purpose of
incorporating a business corporation under the New Jersey Business
Corporation Act.
FIRST: The name of the corporation (hereinafter called the
-----
"Corporation") is Check Mart of New Jersey, Inc.
SECOND: The name and address of the initial registered
------
office of the Corporation in the State of New Jersey is The
Corporation Trust Company, 820 Bear Tavern Road, West Trenton, New
Jersey 08628. The registered office of the Corporation in the State
of New Jersey shall be deemed for venue and official publication
purposes to be located in Mercer County.
THIRD: The Corporation has as its purpose the engaging in
-----
any lawful act or activity for which corporations may be incorporated
under the New Jersey Business Corporation Act, as from time to time
amended or supplemented.
FOURTH: The aggregate number of shares that the Corporation
------
shall have authority to issue is 100, all of which shares shall be
Common Shares having a par value of $0.01 each.
FIFTH: The name and mailing address of the incorporator is
-----
John J.M. Selig, Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New
York, New York 10153.
SIXTH: In furtherance and not in limitation of the powers
-----
conferred by law, the board of directors of the Corporation is
expressly authorized to make, alter or repeal the By-laws of the
Corporation, but any By-laws adopted by the board of directors may be
amended or repealed by the stockholders entitled to vote thereon.
Election of directors need not be by written ballot.
SEVENTH: Notwithstanding any provisions in the By-laws to
-------
the contrary, each shareholder shall have one vote for each share
entitled to vote on matters to be decided by a vote of the
<PAGE>
shareholders. There shall be no cumulative voting for the election of
directors.
EIGHTH: A director shall not be personally liable to the
------
Corporation or its shareholders for damages for any breach of duty as
a director, except for any matter in respect of which such director
shall be liable by reason that, in addition to any and all other
requirements for such liability, there shall have been a judgment or
other final adjudication adverse to such director that establishes
that such director's acts or omissions were in bad faith or involved
intentional misconduct or a knowing violation of law or that such
director personally gained in fact a financial profit or other
advantage to which such director was not legally entitled. Neither
the amendment nor the repeal of this Certificate shall eliminate or
reduce the effect of this Certificate in respect to any matter
occurring, or any cause of action, suit or claim that, but for this
Certificate, would accrue or arise, prior to such amendment, repeal or
adoption of an inconsistent provision.
NINTH: The Corporation shall indemnify, to the fullest
-----
extent permitted by the New Jersey Business Corporation Act, as the
same may be amended or supplemented from time to time, all persons
whom it is permitted to indemnify pursuant thereto.
TENTH: The number of directors constituting the first board
-----
of directors of the Corporation is two (2) and the names and the
address of the persons who are to serve as the first directors of the
Corporation are as follows:
NAME ADDRESS
---- -------
Jeffrey A. Weiss Dollar Financial Group
1436 Lancaster Avenue
Suite 210
Berwyn, PA 19312
Donald F. Gayhardt Dollar Financial Group
1436 Lancaster Avenue
Suite 210
Berwyn, PA 19312
<PAGE>
IN WITNESS WHEREOF, the undersigned has duly executed this
Certificate of Incorporation on this 29th day of January, 1996.
/s/ John J.M. Selig
--------------------
John J.M. Selig
Sole Incorporator
NYFS06...:\47\41847\0008\1710\CRTD126S.020
Exhibit 3.1(f)(i)
<PAGE>
STATE OF NEW MEXICO
CERTIFICATE OF INCORPORATION
OF
NEW MEXICO CHECK MART, INC.
127,160-0
The State Corporation Commission certifies that duplicate
originals of the Articles of Incorporation attached hereto, duly
signed and verified pursuant to the provisions of the BUSINESS
Corporation Act, have been received by it and are found to conform to
law.
Accordingly, by virtue of the authority vested in it by law,
the State Corporation Commission issues this Certificate of
Incorporation, and attaches hereto a duplicate original of the
Articles of Incorporation.
In Testimony Whereof, the State Corporation
Commission of the State of New Mexico has
caused this certificate to be signed by its
Chairman and the Seal of said Commission to
be affixed at the City of Santa Fe on
MAY 24, 1985
----------------------------------------
[signature illegible]
----------------------------------------
Chairman
By:
[signature illegible]
----------------------------------------
Director
NYFS06...:\47\41847\0008\1710\CRTD116S.510
<PAGE>
ARTICLES OF INCORPORATION
OF
NEW MEXICO CHECK MART, INC.
The undersigned natural persons of the age of 21 years or
more, acting as incorporators of a corporation (the "Corporation")
under the provisions of the New Mexico Business Corporation Act (this
act as amended from time to time is referred to herein as the Act),
adopt the following Articles of Incorporation:
ARTICLE I.
Name
-----
The name of the Corporation is New Mexico Check Mart, Inc.
ARTICLE II.
Duration
---------
The Corporation shall have perpetual existence.
ARTICLE III.
Purposes and Powers
--------------------
The Corporation is organized for the following purposes and
shall have the following powers:
A. To operate a check cashing service; and
B. To participate in any other lawful business for which
corporations may be organized under the Act.
NYFS06...:\47\41847\0008\1710\ARTD126J.350
<PAGE>
The Corporation shall have the power to do everything
necessary, proper, advisable, or convenient to accomplish any of the
purposes hereinabove set forth, including all things incidental to or
connected with their accomplishment, that are not forbidden by the
Act, by other law, or by these Articles of Incorporation.
ARTICLE IV.
Authorized Shares
------------------
The Corporation shall have authority to issue 50,000 shares
of common stock of a single class.
ARTICLE V.
Preemptive Rights
------------------
The holders of the common stock of the Corporation shall
have no preemptive rights, as such holders, to acquire any shares or
securities of any class that may at any time be or have been issued by
the Corporation.
ARTICLE VI.
Provisions for Regulation of the
---------------------------------
Internal Affairs of the Corporation
------------------------------------
Section 1. Bylaws. The initial Bylaws of the Corporation
---------- ------
shall be adopted by its Board of Directors. The power to alter,
amend, or repeal the Bylaws, or to adopt new Bylaws shall be vested in
the Board of Directors. The Bylaws may contain any provisions for the
regulation and management of the
<PAGE>
affairs of the Corporation not inconsistent with the Act, or these
Articles of Incorporation.
Section 2. Transactions in which Directors have an
---------- ---------------------------------------
Interest. Any contract or other transaction between the Corporation
--------
and one or more of its directors, or between the Corporation and any
firm of which one or more of its directors are members or employees,
or in which they are interested, or between the Corporation and any
corporation or association of which one or more of its directors are
shareholders, members, directors, officers, or employees, or in which
they are interested, shall be valid for all purposes, notwithstanding
the presence of the director or directors at the meeting of the Board
of Directors of the Corporation, which acts upon, or in reference to,
the contract or transaction, and notwithstanding his or their
participation in the action, if the fact of such interest shall be
disclosed or known to the Board of Directors and the Board of
Directors shall, nevertheless, authorize or ratify the contract or
transaction, the interested director or directors to be counted in
determining whether a quorum is present and to be entitled to vote on
such authorization or ratification. This section shall not be
construed to invalidate any contract or other transaction that would
otherwise be valid under the common and statutory law applicable to
it.
<PAGE>
ARTICLE VII.
Address of Initial Registered Office and
-----------------------------------------
Name of Initial Registered Agent
---------------------------------
Section 1. Registered Office. The address of the initial
---------- -----------------
registered office of the Corporation is 4521 Central Avenue, N.E.,
Albuquerque, New Mexico.
Section 2. Registered Agent. The name of the initial reg
---------- ----------------
istered agent of the Corporation, an individual resident in New Mexico
whose business office is at the above address, is William Beamish.
ARTICLE VIII.
Board of Directors
-------------------
Section 1. Initial Board of Directors. The initial Board
---------- --------------------------
of Directors shall consist of two members, and the names and addresses
of the persons who are to serve as directors until the first annual
meeting of shareholders, or until their successors shall have been
elected and qualified, are:
Name Address
---- -------
William Beamish 4521 Central Avenue, N.E.
Albuquerque, NM 87108
Brent Therrien 10024-82nd Avenue
Edmonton, Alberta, Canada
Section 2. Increase or Decrease of Directors. The number
---------- ---------------------------------
of Directors may be increased or decreased from time to time by
amendment to, or in the manner provided in, the Bylaws;
<PAGE>
but no decrease shall have the effect of shortening the term of any
incumbent director.
ARTICLE IX.
Incorporators
--------------
The name and address of the Incorporators of the Corporation
are:
Name Address
---- -------
William Beamish 4521 Central Avenue, N.E.
Albuquerque, NM 87108
Brent Therrien 10024-82nd Avenue
Edmonton, Alberta, Canada
<PAGE>
EXECUTED this 8 day of May, 1985.
/s/ William Beamish
------------------------------
William Beamish
/s/ Brent Therrien
------------------------------
Brent Therrien
STATE OF )
----------------
) ss:
COUNTY OF )
---------------
The foregoing instrument was acknowledged before me this 8
day of May, 1985, by William Beamish and Brent Therrien.
[signature illegible]
------------------------------
Notary Public
My Commission Expires:
Barrister & Solicitor
------------------------------
No Expiry Date
NYFS...:\47\41847\0008\1710\ART126J.350
Exhibit 3.1(f)(ii)
<PAGE>
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
NEW MEXICO CHECK MART, INC. / 127,160-0
----------------------------------------------------------------------
CORPORATE NAME AND NMSCC CERTIFICATE OF INCORPORATION NUMBER
Pursuant to the provisions of Section 53-13-4, NMSA 1978,
the undersigned corporation adopts the following Articles of Amendment
to its Articles of Incorporation:
FIRST: The corporate name of the corporation is:
NEW MEXICO CHECK MART, INC.
SECOND: The following amendment to the Articles of Incorporation was
adopted by the SOLE SHAREHOLDER of the corporation on January 30, 1995
in the manner prescribed by the New Mexico Business Corporation Act:
ARTICLE I.
NAME
-----
THE NAME OF THE CORPORATION IS CHECK MART OF NEW MEXICO, INC.
THIRD: The number of shares of the corporation outstanding at the
time of such adoption was ONE HUNDRED and the number of shares
entitles to vote thereon was ONE HUNDRED.
FOURTH: The designation and number of outstanding shares of each
class entitled to vote thereon as a class were as follows:
CLASS NUMBER OF SHARES
INAPPLICABLE
FIFTH: The number of shares voting for such amendment was ONE
HUNDRED and the number of shares voting against such amendment was
ZERO.
SIXTH: The number of shares of each class entitled to vote thereon
as a class voted for and against such amendment, respectively, was:
<PAGE>
CLASS NUMBER OF SHARES VOTING
FOR AGAINST
INAPPLICABLE
SEVENTH: The manner, if not set forth in such amendment, in which any
exchange, reclassification, or cancellation of issued shares provided
for in the amendment shall be effected, is as follows:
NO CHANGE
Dated: January 30, 1995.
NEW MEXICO CHECK MART, INC.
By /s/ Jeffrey Weiss
------------------------------
Jeffrey Weiss, President
and /s/ Donald Gayhardt
------------------------------
Donald Gayhardt, Secretary
Under penalty of perjury, the undersigned declares that the
foregoing document executed by the corporation and that the statements
contained therein are true and correct to the best of my knowledge.
/s/ Donald Gayhardt
------------------------------
Donald Gayhardt, Secretary
NYFS06...:\47\41847\0008\1710\AMDD116R.110
Exhibit 3.1(g)(i)
<PAGE>
ARTICLES OF INCORPORATION
OF
CHECK MART OF PENNSYLVANIA, INC.
--------------------------------
The undersigned, being a natural person of the age of 18
years or older, does hereby act as incorporator for the purpose of
incorporating a business corporation under the Business Corporation
Law of 1988.
FIRST: The name of the corporation (hereinafter called the
-----
"Corporation") is Check Mart of Pennsylvania, Inc.
SECOND: The name of the commercial office provider is CT
------
Corporation System located at One Commerce Square, 417 Walnut Street,
Harrisburg, Pennsylvania 17101 and the county of location for venue
purposes is Philadelphia County.
THIRD: The Corporation has as its purpose the engaging in
-----
any lawful act or activity for which corporations may be incorporated
under the Business Corporation Law of 1988, as from time to time
amended or supplemented.
FOURTH: The aggregate number of shares that the Corporation
------
shall have authority to issue is 100, all of which shares shall be
Common Shares having a par value of $0.01 each.
FIFTH: The name and mailing address of the incorporator is
-----
John J.M. Selig, Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New
York, New York 10153.
SIXTH: In furtherance and not in limitation of the powers
-----
conferred by law, the board of directors of the Corporation is
expressly authorized to make, alter or repeal the By-laws of the
Corporation, but any By-laws adopted by the board of directors may be
amended or repealed by the stockholders entitled to vote thereon.
Election of directors need not be by written ballot.
SEVENTH: Notwithstanding any provisions in the By-laws to
-------
the contrary, each shareholder shall have one vote for each share
entitled to vote on matters to be decided by a vote of the
shareholders. There shall be no cumulative voting for the election of
directors.
EIGHTH: A director shall not be personally liable to the
------
Corporation or its shareholders for damages for any breach of
<PAGE>
duty as a director, except for any matter in respect of which such
director shall be liable by reason that, in addition to any and all
other requirements for such liability, there shall have been a
judgment or other final adjudication adverse to such director that
establishes that such director's acts or omissions were in bad faith
or involved intentional misconduct or a knowing violation of law or
that such director personally gained in fact a financial profit or
other advantage to which such director was not legally entitled.
Neither the amendment nor the repeal of this Article shall eliminate
or reduce the effect of this Article in respect to any matter
occurring, or any cause of action, suit or claim that, but for this
Article, would accrue or arise, prior to such amendment, repeal or
adoption of an inconsistent provision.
NINTH: The Corporation shall indemnify, to the fullest
-----
extent permitted by the Business Corporation Law of 1988, as the same
may be amended or supplemented from time to time, all persons whom it
is permitted to indemnify pursuant thereto.
IN WITNESS WHEREOF, the undersigned has duly executed these
Articles of Incorporation on this 29th day of January, 1996.
/s/ John J.M. Selig
-------------------------
John J.M. Selig
Sole Incorporator
NYFS06...:\47\41847\0008\1710\ARTD126N.100
Exhibit 3.1(h)(i)
<PAGE>
ARTICLES OF INCORPORATION
OF
CHECK MART OF TEXAS, INC.
--------------------------
The undersigned, being a natural person of the age of 18
years or older, does hereby act as incorporator for the purpose of
incorporating a business corporation under the Texas Business
Corporation Act.
FIRST: The name of the corporation (hereinafter called the
-----
"Corporation") is Check Mart of Texas, Inc.
SECOND: The name and address of the initial registered
------
office of the Corporation in the State of Texas is C T Corporation
System, 350 North St. Paul Street, Dallas, Texas 75201. The
registered office of the Corporation in the State of Texas shall be
deemed for venue and official publication purposes to be located in
Dallas County.
THIRD: The Corporation has as its purpose the engaging in
-----
any or all lawful business for which corporations may be incorporated
under the Texas Business Corporation Act, as from time to time amended
or supplemented.
FOURTH: The aggregate number of shares that the Corporation
------
shall have authority to issue is 100, all of which shares shall be
Common Shares having a par value of $0.01 each.
FIFTH: The name and mailing address of the incorporator is
-----
John J.M. Selig, Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New
York, New York 10153.
SIXTH: In furtherance and not in limitation of the powers
-----
conferred by law, the board of directors of the Corporation is
expressly authorized to make, alter or repeal the By-laws of the
Corporation, but any By-laws adopted by the board of directors may be
amended or repealed by the stockholders entitled to vote thereon.
Election of directors need not be by written ballot.
SEVENTH: Notwithstanding any provisions in the By-laws to
-------
the contrary, each shareholder shall have one vote for each share
entitled to vote on matters to be decided by a vote of the
<PAGE>
shareholders. There shall be no cumulative voting for the election of
directors.
EIGHTH: A director shall not be personally liable to the
------
Corporation or its shareholders for damages for any breach of duty as
a director, except for any matter in respect of which such director
shall be liable by reason that, in addition to any and all other
requirements for such liability, there shall have been a judgment or
other final adjudication adverse to such director that establishes
that such director's acts or omissions were in bad faith or involved
intentional misconduct or a knowing violation of law or that such
director personally gained in fact a financial profit or other
advantage to which such director was not legally entitled. Neither
the amendment nor the repeal of this Article shall eliminate or reduce
the effect of this Article in respect to any matter occurring, or any
cause of action, suit or claim that, but for this Article, would
accrue or arise, prior to such amendment, repeal or adoption of an
inconsistent provision.
NINTH: The Corporation shall indemnify, to the fullest
-----
extent permitted by the Texas Business Corporation Act, as the same
may be amended or supplemented from time to time, all persons whom it
is permitted to indemnify pursuant thereto.
TENTH: The period of duration of the Corporation is
-----
perpetual.
ELEVENTH: The Corporation will not commence business until
--------
it has received for the issuance of its shares consideration of the
value of at least $1,000.00, consisting of money, labor done, or
property actually received.
TWELFTH: Shareholders of the Corporation shall have no
-------
preemptive right to acquire additional, unissued, or treasury shares
of the Corporation.
THIRTEENTH: The number of directors constituting the
----------
initial board of directors of the Corporation is two (2), and the name
and the address of the persons who are to serve as directors until the
first annual meeting of the shareholders or until their successors are
elected and qualified are:
<PAGE>
NAME ADDRESS
---- -------
Jeffrey A. Weiss Dollar Financial Group
1436 Lancaster Avenue
Suite 210
Berwyn, PA 19312
Donald F. Gayhardt Dollar Financial Group
1436 Lancaster Avenue
Suite 210
Berwyn, PA 19312
IN WITNESS WHEREOF, the undersigned has duly executed these
Articles of Incorporation on this 29th day of January, 1996.
/s/ John J.M. Selig
-------------------------
John J.M. Selig
Sole Incorporator
NYFS06...:\47\41847\0008\1710\ARTD126R.010
Exhibit 3.1(i)(i)
<PAGE>
ARTICLES OF INCORPORATION
OF
MMC OF UTAH, INC.
THE UNDERSIGNED, being of full age, for the purpose of forming a
corporation pursuant to the provisions of the Utah Revised Business
Corporation Act, does hereby execute the following Articles of
Corporation:
FIRST: The name of this corporation is:
MMC OF UTAH, INC.
SECOND: The purpose of this corporation is to engage in any
lawful act or activity for which corporations may be organized under
the Utah Revised Business Corporation Act.
THIRD: The street address in the State of Utah of the
corporation's initial registered office is 333 East Fourth Street,
Salt Lake City, Utah, 84111 and the name of the initial registered
agent at such address is Lon Rodney Kump, Esquire.
FOURTH: This corporation is authorized to issue only one class
of shares of stock; and the total number of shares which this
corporation is authorized to issue is:
One hundred (100) shares Par value $.001 per share
FIFTH: The name and address of the incorporator is Robert
Worthington, 105 North Watts Street, Philadelphia, PA 19107.
IN WITNESS WHEREOF, these Articles have been subscribed this 11th
day of August, 1994 by the undersigned, who affirms that the
statements made herein are true under the penalties of perjury.
/s/ Robert Worthington
---------------------------------------------
Robert Worthington, Incorporator
The undersigned hereby accepts appointment as Registered Agent for the
above named corporation.
By:/s/ Lon Rodney Kump
------------------------------------------
Lon Rodney Kump, Esquire
NYFS06...:\47\41847\0008\1710\ARTD126M.500
Exhibit 3.1(i)(ii)
<PAGE>
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
MMC OF UTAH, INC.
To the Secretary of State:
Pursuant to the provisions of the Utah Revised Business
Corporation Act, Section 16-10a-1006, the undersigned corporation
hereby amends its Articles of Incorporation, and for that purpose,
submits the following statements:
1. The name of the corporation is:
MMC OF UTAH, INC.
2. The text of each amendment adopted is:
FIRST: THE NAME OF THIS CORPORATION IS:
CHECK MART OF UTAH, INC.
3. The amendment to the Articles of Incorporation was duly
adopted on January 30, 1995 by the SOLE SHAREHOLDER of the corporation
in accordance with the provisions of Sections 16-10a-1001 and 16-10a-
1003 of the Utah Revised Business Corporation Act;
4. The number of shares of the corporation outstanding at
the time of such adoption was ONE HUNDRED and the number of shares
entitles to vote thereon was ONE HUNDRED; and
5. The number of shares voting for such amendment was ONE
HUNDRED and the number of shares voting against such amendment was
ZERO.
Dated: January 30, 1995.
MMC OF UTAH, INC.
/s/ Donald Gayhardt
----------------------------------------
Donald Gayhardt, Secretary
NYFS06...:\47\41847\0008\1710\EXHD126P.020
Exhibit 3.1(j)(i)
<PAGE>
ARTICLES OF INCORPORATION
OF
MMC OF WASHINGTON, INC.
Columbia Corporate Services, Inc., a Washington corporation,
as incorporator of a corporation under the Washington Business
Corporation Act (RCW Title 23B), adopts the following Articles of
Incorporation:
ARTICLE 1. NAME AND DURATION
-----------------------------
The name of this corporation is MMC of Washington, Inc., and
the duration of the corporation's existence shall be perpetual.
ARTICLE 2. PURPOSE AND POWERS
------------------------------
This corporation shall have the power to engage in any
business, trade or activity which may lawfully be conducted by a
corporation organized under the Washington Business Corporation Act
(RCW Title 23B). This corporation shall have the authority to engage
in any and all such activities as are incidental or conducive to the
attainment of the purpose of this corporation and to exercise any and
all powers authorized or permitted under any laws that may be now or
hereafter become applicable or available to this corporation.
<PAGE>
ARTICLE 3. SHARES
------------------
This corporation shall have authority to issue One Hundred
Thousand (100,000) shares of common stock, each share of which shall
have no par value.
ARTICLE 4. NO PREEMPTIVE RIGHTS
--------------------------------
Except as may otherwise be provided by the Board of
Directors, no preemptive rights shall exist with respect to shares of
stock or securities convertible into shares of stock of this
corporation.
ARTICLE 5. NO CUMULATIVE VOTING
--------------------------------
At each election of directors, every shareholder entitled to
vote at such election has the right to vote in person or by proxy the
number of shares held by such shareholder for as many persons as there
are directors to be elected. No cumulative voting for directors shall
be permitted.
ARTICLE 6. DIRECTORS
---------------------
The number of directors of this corporation shall be
determined in the manner provided by the bylaws and may be increased
or decreased from time to time in the manner provided therein. The
number of directors constituting the initial Board of Directors of the
corporation is two (2). The names and addresses of the persons who
are to serve as the initial directors until the first annual meeting
of the shareholders of
<PAGE>
the corporation, or until their successors are elected and qualified
are as follows:
Jeffrey Weiss
140th Place N.E. #201
Bellevue, Washington 98007
Donald Gayhardt
140th Place N.E. #201
Bellevue, Washington 98007
ARTICLE 7. CONTRACTS IN WHICH DIRECTORS HAVE AN INTEREST
---------------------------------------------------------
Any contract or other transaction between this corporation
and one or more of its directors, or between this corporation and any
corporation, firm, association or other entity, of which one or more
of this corporation's directors are shareholders, members, directors,
officers or employees or in which they are interested, shall be valid
for all purposes, notwithstanding the presence of such director or
directors at the meeting of the Board of Directors which acts upon or
in reference to such contract or transaction and notwithstanding the
participation of such director or directors in such action, by voting
or otherwise, even though the presence or vote, or both, of such
director or directors might have been necessary to obligate this
corporation upon such contract or transaction; provided, that the fact
of such interest shall be disclosed to or known by the directors
acting on such contract or transaction.
<PAGE>
ARTICLE 8. REGISTERED AGENT AND REGISTERED OFFICE
--------------------------------------------------
The name of the initial registered agent of this corporation
and the address of the initial registered office is as follows:
Columbia Corporate Services, Inc.
6500 Columbia Center
701 Fifth Avenue
Seattle, Washington 98104-7003
ARTICLE 9. AMENDMENTS TO THE ARTICLES OF INCORPORATION
-------------------------------------------------------
This corporation reserves the right to amend, alter, change
or repeal any of the provisions contained in its Articles of
Incorporation in any manner now or hereafter prescribed or permitted
by statute. All rights of the shareholders, directors,and officers of
this corporation are granted subject to this reservation.
ARTICLE 10. BYLAWS
-------------------
The Board of Directors shall have the power to adopt, amend,
or repeal the bylaws of this corporation, subject to the power of the
shareholders to amend or repeal such bylaws. The shareholders shall
also have the power to adopt, amend or repeal the bylaws of this
corporation.
ARTICLE 11. INDEMNIFICATION
----------------------------
The corporation has the power to indemnify, and to purchase
and maintain insurance for, its directors, officers, trustees,
employees, and other persons and agents, and (without limited the
generality of the foregoing) shall indemnify its
<PAGE>
directors, officers, trustees, employees, and other persons and agents
against all liability, damage, and expenses arising from or in
connection with service for, employment by, or other affiliation with
this corporation or other firms or entities to the maximum extent and
under all circumstances permitted by law.
ARTICLE 12. INCORPORATOR
-------------------------
The name and address of the incorporator is as follows:
Columbia Corporate Services, Inc.
6500 Columbia Center
701 Fifth Avenue
Seattle, Washington 98104-7003
The undersigned corporation, as incorporator of this
corporation under the Washington Business Corporation Act as codified
at RCW 23B, adopts these Articles of Incorporation.
Dated this 20th day of July, 1994.
Columbia Corporate Services, Inc.
By: /s/ Nick Solandros
-----------------------
Nick Solandros
Secretary,
Incorporator
NYFS06...:\47\41847\0008\1710\ARTD116R.200
Exhibit 3.1(j)(ii)
<PAGE>
ARTICLES OF AMENDMENT
---------------------
Pursuant to RCW 23B.10.060 of the Washington Business Corporation Act,
the undersigned corporation hereby submits the following amendment(s)
to the corporation's Articles of Incorporation.
1. The name of the corporation is: MMC OF WASHINGTON, INC.
(Note; Corporate name listed above must be identical to the
records of the office of the Secretary of State)
2. The text of EACH amendment(s) as adopted is (are) as follows:
----
(Attach separate sheet, if necessary)
ARTICLE 1. NAME AND DURATION
-----------------------------
THE NAME OF THIS CORPORATION IS CHECK MART OF WASHINGTON, INC.
AND THE DURATION OF THE CORPORATION'S EXISTENCE SHALL BE
PERPETUAL.
3. If an amendment for an exchange, reclassification, or
cancellation of issued shares, provisions for implementing the
amendment, if not contained in the text of the amendment itself,
are as follows:
N/A
4. The date of adoption of EACH amendment(s) was:
----
5. The amendment(s) was (were) adopted by:
Check one of the following statements:
( ) The incorporators. SHAREHOLDER ACTION WAS NOT
REQUIRED.
( ) The board of directors. SHAREHOLDER ACTION WAS NOT
REQUIRED.
( ) Duly approved shareholder action in accordance with the
provisions of RCW 23B.10.030 and RCW 23B.10.040.
(Note: Please refer to copy of statutes listed on
instruction sheet)
<PAGE>
6. These Articles will be effective upon filing, unless an extended
date and/or time appears here: , 19__.
--------------------------
(Note: Extended effective date may not be set at more than 90
days beyond the date the document is stamped "Filed" by the
Secretary of State).
Dated: January 30, 1995
/s/ Donald Gayhardt
----------------------------------------
(Signature of person authorized to sign)
Donald Gayhardt, Secretary
----------------------------------------
(Type or Print Name and Title)
NYFS06...:\47\41847\0008\1710\ARTD116S.310
Exhibit 3.1(k)(i)
<PAGE>
ARTICLES OF INCORPORATION
OF
CHECK MART OF WASHINGTON, D.C., INC.
------------------------------------
The undersigned, being a natural person of the age of 18
years or older, does hereby act as incorporator for the purpose of
incorporating a business corporation under the Business Corporation
Act of the District of Columbia.
FIRST: The name of the corporation (hereinafter called the
-----
"Corporation") is Check Mart of Washington, D.C., Inc.
SECOND: The address of the initial registered office of the
------
Corporation in the District of Columbia is c/o C T Corporation System,
1025 Vermont Avenue, N.W., Washington, D.C. 20005 and the name of the
initial registered agent is C T Corporation System.
THIRD: The Corporation has as its purpose the owning and
-----
operating of retail financial services stores to include check
cashing, money order sales, money transfer sales and other similar
services.
FOURTH: The aggregate number of shares that the Corporation
------
shall have authority to issue is 100, all of which shares shall be
Common Shares having a par value of $0.01 each.
FIFTH: The name and mailing address of the incorporator is
-----
John J.M. Selig, Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New
York, New York 10153.
SIXTH: In furtherance and not in limitation of the powers
-----
conferred by law, the board of directors of the Corporation is
expressly authorized to make, alter or repeal the By-laws of the
Corporation, but any By-laws adopted by the board of directors may be
amended or repealed by the stockholders entitled to vote thereon.
Election of directors need not be by written ballot.
SEVENTH: Notwithstanding any provisions in the By-laws to
-------
the contrary, each shareholder shall have one vote for each share
entitled to vote on matters to be decided by a vote of the
shareholders. There shall be no cumulative voting for the election of
directors.
EIGHTH: A director shall not be personally liable to the
------
Corporation or its shareholders for damages for any breach of duty as
a director, except for any matter in respect of which such director
shall be liable by reason that, in addition to any
<PAGE>
and all other requirements for such liability, there shall have been a
judgment or other final adjudication adverse to such director that
establishes that such director's acts or omissions were in bad faith
or involved intentional misconduct or a knowing violation of law or
that such director personally gained in fact a financial profit or
other advantage to which such director was not legally entitled.
Neither the amendment nor the repeal of this Article shall eliminate
or reduce the effect of this Article in respect to any matter
occurring, or any cause of action, suit or claim that, but for this
Article, would accrue or arise, prior to such amendment, repeal or
adoption of an inconsistent provision.
NINTH: The Corporation shall indemnify, to the fullest
-----
extent permitted by the Business Corporation Act of the District of
Columbia, as the same may be amended or supplemented from time to
time, all persons whom it is permitted to indemnify pursuant thereto.
TENTH: The period of duration of the Corporation is
-----
perpetual.
ELEVENTH: The Corporation will not commence business until
--------
at least one thousand dollars ($1,000.00) has been received as initial
capitalization.
TWELFTH: Shareholders of the Corporation shall have no
-------
preemptive right to acquire additional, unissued, or treasury shares
of the Corporation.
THIRTEENTH: The number of directors constituting the
----------
initial board of directors of the Corporation is two (2), and the name
and the address of the persons who are to serve as directors until the
first annual meeting of the shareholders or until their successors are
elected and qualified are:
NAME ADDRESS
---- -------
Jeffrey A. Weiss Dollar Financial Group
1436 Lancaster Avenue
Suite 210
Berwyn, PA 19312
Donald F. Gayhardt Dollar Financial Group
1436 Lancaster Avenue
Suite 210
Berwyn, PA 19312
<PAGE>
IN WITNESS WHEREOF, the undersigned has duly executed these
Articles of Incorporation on this 1st day of February, 1996.
/s/ John J.M. Selig
------------------------------
John J.M. Selig
Sole Incorporator
NYFS06...:\47\41847\0008\1710\EXHD126R.480
Exhibit 3.1(l)(i)
<PAGE>
ARTICLES OF INCORPORATION
OF
CHECK MART OF WISCONSIN, INC.
Pursuant to Section 180.0202 of the Wisconsin Business Corporation Law
the undersigned hereby executes Articles of Incorporation for the
purpose of forming a Wisconsin for-profit corporation under Chapter
180 of the Wisconsin Statutes, repealed and recreated by 1989
Wisconsin Act 303.
ARTICLE 1. The name of the corporation is:
CHECK MART OF WISCONSIN, INC.
-----------------------------
ARTICLE 2. The corporation shall have authority to issue one
hundred (100) shares of common stock $.01 par value.
ARTICLE 3. The address of its initial registered office in the
State of Wisconsin is 44 East Mifflin Street, Madison, Wisconsin
------------------------------------------
53703. The name of its registered agent at such address is CT
----- --
Corporation System.
------------------
ARTICLE 4. The name and mailing address of the sole incorporator
is as follows:
Steven C. Bravato
KLEHR, HARRISON, HARVEY, BRANZBURG & ELLERS
1401 Walnut Street
Philadelphia, PA 19102
ARTICLE 5. The names of the individuals constituting the initial
Board of Directors of the corporation are:
Jeffrey Weiss
Donald Gayhardt
I, THE UNDERSIGNED, being the sole incorporator hereinbefore
named, for the purpose of forming a corporation pursuant to the
Wisconsin Business Corporation Law, do make these articles, hereby
declaring and certifying that this is my act and deed and the facts
herein stated are true, and accordingly have hereunto set my hand this
14th day of July, 1995.
/s/ Steven C. Bravato
----------------------------------------
Steven C. Bravato, Sole Incorporator
NYFS06...:\47\41847\0008\1710\ARTD116R.530
Exhibit 3.1(m)(i)
<PAGE>
CERTIFICATE OF INCORPORATION
OF
DFG WAREHOUSING CO., INC.
THE UNDERSIGNED, being a natural person for the purpose of
organizing a corporation under the General Corporation Law of the
State of Delaware, hereby certifies that:
FIRST: The name of the Corporation is DFG Warehousing Co.,
Inc.
SECOND: The address of the registered office of the
Corporation in the State of Delaware is 1209 Orange Street, City of
Wilmington, County of New Castle, State of Delaware. The name of the
registered agent of the Corporation in the State of Delaware at such
address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any
lawful act or activity for which corporations may be organized under
the General Corporation Law of the State of Delaware, as from time to
time amended.
FOURTH: The total number of shares of capital stock which
the Corporation shall have authority to issue is 100, all of which
shares shall be Common Stock having a par value of $0.01 each.
FIFTH: The name and mailing address of the incorporator are
Scott B. Rose, Esq., c/o Weil, Gotshal & Manges LLP, 767 Fifth Avenue,
New York, New York 10153.
SIXTH: Upon filing the Certificate of Incorporation, the
names and mailing addresses of the persons who are to serve as
directors until the first annual meeting of stockholders or until
their successors are elected and qualify are:
Jeffrey A. Weiss
Dollar Financial Group, Inc.
1436 Lancaster Avenue
Suite 210
Berwyn, PA 19312
Donald F. Gayhardt
Dollar Financial Group, Inc.
<PAGE>
1436 Lancaster Avenue
Suite 210
Berwyn, PA 19312
SEVENTH: In furtherance and not in limitation of the powers
conferred by law, subject to any limitations contained elsewhere in
these articles of incorporation, by-laws of the Corporation may be
adopted, amended or repealed by a majority of the board of directors
of the Corporation, but any by-laws adopted by the board of directors
may be amended or repealed by the stockholders entitled to vote
thereon. Election of directors need not be by written ballot.
EIGHTH: (a) A director of the Corporation shall not be
personally liable either to the Corporation or to any stockholder for
monetary damages for breach of fiduciary duty as a director, except
(i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, or (ii) for acts or omissions which
are not in good faith or which involve intentional misconduct or
knowing violation of the law, or (iii) for any matter in respect of
which such director shall be liable under Section 174 of Title 8 of
the General Corporation Law of the State of Delaware or any amendment
thereto or successor provision thereto, or (iv) for any transaction
from which the director shall have derived an improper personal
benefit. Neither amendment nor repeal of this paragraph (a) nor the
adoption of any provision of the Certificate of Incorporation incon-
sistent with this paragraph (a) shall eliminate or reduce the effect
of this paragraph (a) in respect of any matter occurring, or any cause
of action, suit or claim that, but for this paragraph (a) of this
Article, would accrue or arise, prior to such amendment, repeal or
adoption of an inconsistent provision.
(b) The Corporation shall indemnify any person who was or
is a party or is threatened to be made a party to, or testifies in,
any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative in nature, by
reason of the fact that such person is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, employee benefit
plan, trust or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with
such action, suit or proceeding to the full extent permitted by law,
and the Corporation may adopt By-laws or enter into agreements
<PAGE>
with any such person for the purpose of providing for such
indemnification.
IN WITNESS WHEREOF, the undersigned has duly executed this
Certificate of Incorporation on this 15th day of August, 1996.
/s/ Scott B. Rose
---------------------
Scott B. Rose, Esq.
Sole Incorporator
NYFS06...:\47\41847\0008\1710\CRTD126L.510
Exhibit 3.1(n)(i)
<PAGE>
ARTICLES OF INCORPORATION
--------------------------
OF
---
DOLLAR FINANCIAL INSURANCE CORP.
---------------------------------
FIRST: The name of the corporation is:
DOLLAR FINANCIAL INSURANCE CORP.
SECOND: The address of its registered office is:
(a) 1436 Lancaster Avenue
Berwyn, PA 19312
County of Chester
THIRD: The corporation is incorporated under the
provisions of the Pennsylvania Business Corporation Law of 1988.
FOURTH: The total number of shares of stock which the
corporation shall have authority to issue is:
(a) 100 (One Hundred) shares of Common Stock, $.01 (One
Cent) par value.
FIFTH: The nature of the business or purposes to be
conducted or promoted are:
(a) To have unlimited power to engage in any lawful act or
activity for which corporations may be organized under
Pennsylvania Business Corporation Law of 1988,
including without limitation;
(i) To engage in the business of insurance; and
(ii) To act as an insurance agent.
<PAGE>
SIXTH: The name and mailing address of the incorporator
is:
(a) Bonnie S. Sander
12th Floor Packard Building
15th and Chestnut Streets
Philadelphia, PA 19102
SEVENTH: Shareholders shall not have the right to cumulate
their shares in voting for the election of directors.
IN TESTIMONY WHEREOF, the incorporator has signed these
Articles of Incorporation this 17th day of August, 1995.
/s/ Bonnie S. Sander
-----------------------------------
Bonnie S. Sander, [SEAL]
Incorporator
NYFS06...:\47\41847\0008\1710\ARTD126J.460
Exhibit 3.1(o)(i)
<PAGE>
CERTIFICATE OF INCORPORATION
-----------------------------
OF
---
DOLLAR INSURANCE ADMINISTRATION CORP.
--------------------------------------
FIRST: The name of the corporation is: DOLLAR INSURANCE
ADMINISTRATION CORP.
SECOND: The address of its registered office in the State
of Delaware is: Corporation Trust Center, 1209 Orange Street,
Wilmington, New Castle County, Delaware 19801. The name of its
registered agent at such address is: THE CORPORATION TRUST COMPANY.
THIRD: The nature of the business or purposes to be
conducted or promoted is:
To have unlimited power to engage in any lawful act or
activity for which corporations may be organized under the
General Corporation Law of Delaware.
FOURTH: The total number of shares of stock which the
corporation shall have authority to issue is: 100 (One Hundred)
shares of Common Stock, $.01 (One Cent) par value.
FIFTH: The name and mailing address of the incorporator
is as follows:
Name Address
---- -------
Bonnie S. Sander 12th Floor Packard Building
15th and Chestnut Streets
Philadelphia, PA 19102
<PAGE>
SIXTH: In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors is expressly authorized
to make, alter or repeal the Bylaws of the corporation.
SEVENTH: Elections of directors need not be by written
ballot unless the Bylaws of the corporation shall so provide.
EIGHTH: Whenever a compromise or arrangement is proposed
between this corporation and its creditors or any class of them and/or
between this corporation and its stockholders or any class of them,
any court of equitable jurisdiction within the State of Delaware may,
on the application in a summary way of this corporation or of any
creditor or stockholder thereof or on the application of any receiver
or receivers appointed for this corporation under the provisions of
Section 291 of Title 8 of the Delaware Code or on the application of
trustees in dissolution or of any receiver or receivers appointed for
this corporation under the provisions of Section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this
corporation, as the case may be, to be summoned in such manner as the
said court directs. If a majority in number representing three-
fourths in value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this corporation, as the case
may be, agree to any compromise or arrangement and to any
<PAGE>
reorganization of this corporation as consequence of such compromise
or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said
application has been made, be binding on all the creditors or class of
creditors, and/or on all the stockholders or class of stockholders, of
this corporation, as the case may be, and also on this corporation.
NINTH: A director of this corporation shall not be
personally liable to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director; provided, however,
that this shall not exempt a director from liability (i) for any
breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the General Corporation Law of the State of
Delaware, or (iv) for any transaction from which a director derived an
improper personal benefit. In the case of any change in Delaware law
which expands the liability of directors, the limited liability of
directors shall continue as theretofore to the extent permitted by
law; in the case of any change in Delaware law which permits the
corporation, without the requirement of any further action by the
stockholders or directors of the corporation, to limit further
<PAGE>
the liability of directors, then such liability thereupon shall be so
limited to the extent permitted by law.
IN WITNESS WHEREOF, I have hereunto set my hand and seal
this 21st day of July, 1995.
/s/ Bonnie S. Sander
----------------------------------
Bonnie S. Sander, [SEAL]
Incorporator
NYFS06...:\47\41847\0008\1710\CRTD136R.530
Exhibit 3.1(p)(i)
<PAGE>
MICHIGAN DEPARTMENT OF COMMERCE -- CORPORATION AND SECURITIES
BUREAU
(FOR BUREAU USE ONLY) Date
Received
EFFECTIVE DATE: July 23,
1984
Corporation Identification Number
ARTICLES OF INCORPORATION
FOR USE BY DOMESTIC PROFIT CORPORATIONS
(Please read instructions on last page before completing form)
Pursuant to the provisions of Act 284, Public Acts of 1972, as
amended, the undersigned corporation executes the following Articles:
Article I
The name of the corporation is:
FINANCIAL EXCHANGE COMPANY OF MICHIGAN, INC.
Article II
The purpose or purposes for which the corporation is organized is to
engage in any activity within the purposes for which corporations may
be organized under the Business Corporation Act of Michigan.
To engage in any activity within the purposes for which corporations
may be organized under the Business Corporation Act of Michigan.
Article III
The total authorized capital stock is:
Common Shares 50,000 Par Value Per Share $ 1.00
1.
Preferred Shares _________ Par Value Per Share $_______
and/or shares without par value as follows:
Common Shares _________ Stated Value Per Share $_____
2.
Preferred Shares _________ Stated Value Per Share $_____
<PAGE>
3. A statement of all or any of the relative rights, preferences and
limitations of the shares of each class is as follows:
(MICH. - 179 - 1/20/84)
SEAL APPEARS ONLY ON ORIGINAL
Article IV
1. The address of the registered office is:
c/o The Corporation Company, 615 Criswold Street, Detroit,
Michigan 48226
(Street Address) (City) (Zip Code)
2. The mailing address of the registered office if different than
above:
_________________________________, Michigan _________
P.O. Box (City) (Zip Code)
3. The name of the resident agent at the registered office is: The
Corporation Company
Article V
The names(s) and address(es) of the incorporator(s) is (are) as
follows:
Name Residence or Business Address
Debora Smith 1633 Broadway, New York, NY 10019
Vincent R. Smith 1633 Broadway, New York, NY 10019
Bruce Hurlman 1633 Broadway, New York, NY 10019
Article VI (Optional. Delete if not applicable)
When a compromise or arrangement or a plan of reorganization of this
corporation is proposed between this corporation and its creditors or
any class of them or between this corporation and its shareholders or
any class of them, a court of equity jurisdiction within the state, on
application of this corporation or of a creditor or shareholder
thereof, or on application of a receiver appointed for the
corporation, may order a meeting of the creditors or class of
creditors or of the shareholders or class of shareholders to be
affected by the proposed compromise or arrangement or reorganization,
to be summoned in such manner as the court directs. If a majority in
number representing 3/4 in value of the creditors or class of
creditors, or of the shareholders or class of shareholders to be
affected by the
<PAGE>
proposed compromise or arrangement or a reorganization, agree to a
compromise or arrangement or a reorganization of this corporation as a
consequence of the compromise or arrangement, the compromise or
arrangement and the reorganization, if sanctioned by the court to
which the application has been made, shall be binding on all the
creditors or class of creditors, or on all the shareholders or class
of shareholders and also on this corporation.
Article VII (Optional. Delete if not applicable)
Any action required or permitted by the Act to be taken at an annual
or special meeting of shareholders may be taken without a meeting,
without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, is signed by the holders of
outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take the action at a meeting
at which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a meeting
by less than unanimous written consent shall be given to shareholders
who have not consented in writing.
SEAL APPEARS ONLY ON ORIGINAL
<PAGE>
Use space below for additional Articles or for continuation of
previous Articles. Please identify any Article being continued or
added. Attach additional pages if needed.
I (We), the incorporator(s) sign my (our) name(s) this 17th
day of July, 1984.
/s/Debora Smith
---------------
Debora Smith
/s/Vincent R. Smith
-------------------
Vincent R. Smith
/s/Bruce Hurlman
----------------
Bruce Hurlman
(MICH. - 179)
NYFS06...:\47\41847\0008\1710\BYLD166Z.110
Exhibit 3.1(p)(ii)
<PAGE>
MICHIGAN DEPARTMENT OF COMMERCE -- CORPORATION AND SECURITIES BUREAU
(FOR BUREAU USE ONLY) Date Received
CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION
FOR USE BY DOMESTIC CORPORATIONS
(Please read information and instructions on last page)
Pursuant to the provisions of Act 284, Public Acts of 1972
(profit corporations), or Act 162, Public Acts of 1982 (nonprofit
corporations), the undersigned corporation executes the following
Certificate:
1. The present name of the corporation is: Financial Exchange
Company of Michigan, Inc.
2. The corporation identification number (CID) assigned by the
Bureau is: 2 9 2 - 4 1 6
3. The location of its registered office is: c/o The
Corporation Company,
615 Griswold Street Detroit, Michigan 48226
-------------------------------------------------------
(Street Address) (City) (Zip Code)
4. Articles VI and VII of the Articles of Incorporation is
----------
hereby amended to read as follows:
(a) Article VI is deleted in its entirety.
(b) Article VII is renumbered as Article VI to conform with
the deletion of the present Article VI, and shall read
as follows:
Article VI
Any action required or permitted by the Act to be taken at
an annual or special meeting of shareholders may be taken
without a meeting, without prior notice and without a vote,
if a consent in writing, setting forth the action so taken,
is signed by the holders of outstanding stock having not
less than the minimum number of votes that would be
necessary to authorize or take the action at a meeting at
which all shares entitled to vote thereon were present and
voted.
Prompt notice of the taking of the corporate action without
a meeting by less than unanimous written consent shall be
given to shareholders who have not consented in writing.
[SEAL APPEARS ONLY ON ORIGINAL]
<PAGE>
DOCUMENT WILL BE RETURNED TO NAME AND MAILING ADDRESS INDICATED
IN THE BOX BELOW. Include name, street and number (or
P.O. box), city, state and ZIP code.
Mr. John L. Morrissey, Asst. Secretary Telephone:
C T Corporation System Area Code: 212
1633 Broadway Number:664-1666 Ext. 284
------------------------
New York, New York 10019
INFORMATION AND INSTRUCTIONS
1. Submit one original copy of this document. Upon
filing, a microfilm copy will be prepared for the
records of the Corporation and Securities Bureau. The
original copy will then be returned to the address
appearing in the box above as evidence of filing.
Since this document must be microfilmed, it is
important that the filing be legible. Documents with
poor black and white contrast, or otherwise illegible,
will be rejected.
2. This document is to be used pursuant to the provisions
of Act 284, P.A. of 1972, by one or more persons for
the purpose of forming a domestic profit corporation.
3. Article I -- The corporate name of a domestic profit
corporation is required to contain one of the following
words or abbreviations: "Corporation", "Company",
"Incorporated", "Limited", "Corp.", "Co.", "Inc.", or
"Ltd."
4. Article II -- State, in general terms, the character of
the particular business to be carried on. Under
section 202(b) of the Act, it is sufficient to state
substantially, alone or without specifically enumerated
purposes, that the corporation may engage in any
activity within the purposes for which corporations may
be organized under the Act. The Act requires, however,
that educational corporations state their specific
purposes.
5. Article III (2) -- The Act requires the incorporators
of a domestic corporation having shares without par
value to submit in writing the amount of consideration
proposed to be received for each share which shall be
allocated to stated capital. Such stated value may be
indicated either in item 2 of article III or in a
written statement accompanying the articles of
incorporation.
6. Article IV -- A post office box may not be designated
as the address of the registered office. The mailing
address may differ from the address of the registered
office only if a post office box address in the same
<PAGE>
city as the registered office is designated as the
mailing address.
7. Article V -- The Act requires one or more
incorporators. The address(es) should include a street
number and name (or other designation), city or state.
8. The duration of the corporation should be stated in the
articles only if the duration is not perpetual.
9. This document is effective on the date approved and
filed by the Bureau. A later effective date, no more
than 90 days after the date of delivery, may be stated
as an additional article.
10. The articles must be signed in ink by each
incorporator. The names of the incorporators as set
out in article V should correspond with the signatures.
11. FEES: Filing fee . . . . . . . . . . . . . $10.00
Franchise fee -- 1/2 mill (.0005) on each dollar
of authorized
capital stock, with a minimum franchise fee of $25.00
Total minimum fees (Make remittance payable to
State of Michigan) . . . . . . . . . . . . $35.00
12. Mail form and fee to:
Michigan Department of Commerce
Corporation and Securities Bureau
Corporation Division
P.O. Box 30054
Lansing, MI 48909
Telephone: (517) 373-0493
[SEAL APPEARS ONLY ON ORIGINAL]
<PAGE>
DOCUMENT WILL BE RETURNED TO NAME AND Name of person or organization
MAILING ADDRESS INDICATED IN THE BOX remitting fees:
BELOW. Include name, street and number
(or P.O. box), city, state and ZIP code. Spengler Carlson Gubar
Gregory Katz, Assistant Secretary ----------------------
Brodsky & Frischling
--------------------
c/o Spengler Carlson Gubar Brodsky &
520 Madison Avenue
New York, New York 10022 Preparer's name and
business telephone number:
Eric B. Lesser
--------------
(212) 935-5000
--------------
INFORMATION AND INSTRUCTIONS
1. The amendment cannot be filed until this form, or a
comparable document, is submitted.
2. Submit one original copy of this document. Upon filing, a
microfilm copy will be prepared for the records of the
Corporation and Securities Bureau. The original copy will
be returned to the address appearing in the box above as
evidence of filing.
Since this document must be microfilmed, it is important
that the filing be legible. Documents with poor black and
white contrast, or otherwise illegible, will be rejected.
3. This document is to be used pursuant to the provisions of
section 631 of the Act for the purpose of amending the
articles of incorporation of a domestic profit or nonprofit
corporation. Do not use this form for restated articles. A
nonprofit corporation is one incorporated to carry out any
lawful purpose or purposes not involving pecuniary profit or
gain for its directors, officers, shareholders, or members.
A nonprofit corporation formed on a nonstock directorship
basis, as authorized by Section 302 of the Act, may or may
not have members, but if it has members, the members are not
entitled to vote.
4. Item 2 -- Enter the identification number previously
assigned by the Bureau. If this number is unknown, leave it
blank.
5. Item 4 -- The article being amended must be set forth in its
entirety. However, if the article being amended is divided
into separately identifiable sections, only the sections
being amended need be included.
6. This document is effective on the date approved and filed by
the Bureau. A later effective date, no more than 90 days
after the date of delivery, may be stated.
<PAGE>
7. If the amendment is adopted before the first meeting of the
board of directors, item 5(a) must be completed and signed
in ink by a majority of the incorporators if more than one
listed in Article V of the Articles of Incorporation if a
profit corporation, and all the incorporators if a
non-profit corporation. If the amendment is otherwise
adopted, item 5(b) must be completed and signed in ink by
the president, vice-president, chairperson or vice-
chairperson of the corporation.
8. FEE: (Make remittance payable to the State of Michigan.
Include corporation name and CID Number on check or
money order) . . . . . . . . . . . . . . . . . . $10.00
Franchise fee for profit corporations (payable only if
authorized shares have increased):
each additional 20,000 authorized shares or portion
thereof . . . . . . . . . . . . . . . . . . . . $30.00
9. Mail form and fee to:
Michigan Department of Commerce
Corporation and Securities Bureau
Corporation Division
P.O. Box 30054
6546 Mercantile Way
Lansing, MI 48909
Telephone: (517) 334-6302
[SEAL APPEARS ONLY ON ORIGINAL]
<PAGE>
INCORPORATOR(S) BEFORE THE FIRST MEETING OF THE BOARD OF
DIRECTORS OR TRUSTEES. OTHERWISE, COMPLETE SECTION (B)
a. The foregoing amendment to the Articles of Incorporation
was duly adopted on the _____ day of ______________, 19____, in
accordance with the provisions of the Act by the unanimous
consent of the incorporator(s) before the first meeting of the
board of directors or trustees.
Signed this ____________ day of _______________________,
19___
------------------------------ -------------------------
Signature Signature
------------------------------ -------------------------
(Type or Print Name) (Type or Print Name)
------------------------------ -------------------------
Signature Signature
------------------------------ -------------------------
(Type or Print Name) (Type or Print Name)
b. X The foregoing amendment to the Articles of Incorporation
was duly adopted on the 1st day of June, 1990. The
amendment: (check one of the following)
was duly adopted in accordance with Section 611(2) of
the Act by the vote of the shareholders if a profit
corporation, or by the vote of the shareholders or
members if a nonprofit corporation, or by the vote of
the directors if a nonprofit corporation organized on a
nonstock directorship basis. The necessary votes were
cast in favor of the amendment.
was duly adopted by the written consent of all the
directors pursuant to Section 525 of the Act and the
corporation is a nonprofit corporation organized on a
nonstock directorship basis.
was duly adopted by the written consent of the
shareholders or members having not less than the minimum
number of votes required by statute in accordance with
Section 407(1) and (2) of the Act if a nonprofit
corporation, and Section 407(1) of the Act if a profit
corporation. Written notice to shareholders or members
who have not consented in writing has been given.
(Note: Written consent by less than all of the
shareholders or members is permitted only if such
provision appears in the Articles of Incorporation.)
was duly adopted by the written consent of all the
shareholders or members entitled to vote in accordance
with Section 407(3) of the Act if a non-profit
<PAGE>
corporation, and Section 407(2) of the Act if a profit
corporation.
Signed this 1st day of June, 1990
By /s/Edward R. Larkin
--------------------------------------
(Only signature of President, Vice
President, Chairperson and Vice-
Chairperson)
[SEAL APPEARS ONLY
ON ORIGINAL] Edward R. Larkin President
---------------------------------------
(Type or Print Name)(Type or Print Title)
NYFS06...:\47\41847\0008\1710\EXHD136U.570
Exhibit 3.1(q)(i)
<PAGE>
ARTICLES OF INCORPORATION
of
United States Money Exchange, Inc.
-----------------------------------
The undersigned, is a citizen of the United States, desiring
to form a corporation, for profit, under Sections 1701.01 et seq. of
the Revised Code of Ohio, does hereby certify:
FIRST. The name of said corporation shall be United States
Money Exchange, Inc. (the "Corporation").
SECOND. The place in Ohio where its principal office is to
be located is 21 East State Street, Columbus, Franklin County.
THIRD. The purposes for which it is formed are:
To engage in any lawful act or activity for which
corporations may be organized under Sections 1701.01 to
1701.98 inclusive of the Revised Code of Ohio.
Without limiting in any manner the scope and
generality of the foregoing:
To provide financial and check cashing services to
any firm, corporation, company, association,
individual, syndicate or other entity.
To engage in the purchasing and selling of food
stamps and money orders.
<PAGE>
FOURTH. The number of shares which the Corporation is
authorized to have outstanding is:
Five Hundred (500) Common Shares all of which shall be
with a par value of One Dollar ($1.00) each.
FIFTH. The amount of stated capital with which the
Corporation shall begin business is Five Hundred Dollars ($500.00).
SIXTH. Shareholders of the Corporation shall have no
preemptive right to acquire additional, unissued or treasury shares of
the Corporation.
IN WITNESS WHEREOF, I have hereunto subscribed my name, this
5th day of December, 1978.
UNITED STATES MONEY EXCHANGE, INC.
/s/ Marjorie M. Horowitz
----------------------------------------
Marjorie M. Horowitz
NYFS06...:\47\41847\0008\1710\ARTD136P.250
Exhibit 3.1(q)(ii)
<PAGE>
Prescribed by Charter #
----------------
C-109 TED W. BROWN Approved by
--------------
Secretary of State Date
---------------------
Fee $
--------------------
CERTIFICATE OF AMENDMENT
BY INCORPORATOR
(SEC. 1701.70 (A) R.C.)
TO ARTICLES OF
UNITED STATES MONEY EXCHANGE, INC.
-----------------------------------
(Name of Corporation)
I the undersigned, being the incorporator of the above named
corporation, do certify that subscriptions to shares have not been
received in such amount that the stated capital set forth in the
articles as that with which the corporation will begin business and
that I have elected to amend the articles as follows:
ARTICLE FIRST is amended in its entirety to read as
follows:
"FIRST. The name of said corporation shall be
Financial Exchange Company of Ohio, Inc. (the
"Corporation")."
IN WITNESS WHEREOF, I, being the incorporator of the above
named corporation, have hereto subscribed my name this 4th day of
January, 1979.
By /s/ Marjorie M. Horowitz
----------------------------
Marjorie M. Horowitz
By
----------------------------
Incorporators
By
----------------------------
NYFS06...:\47\41847\0008\1710\CRTD136P.530
Exhibit 3.1(q)(iii)
<PAGE>
Prescribed by Charter #
----------------
C-109 TED W. BROWN Approved by
--------------
Secretary of State Date
---------------------
Fee $
--------------------
CERTIFICATE OF AMENDMENT
(BY SHAREHOLDERS)
TO THE ARTICLES OF INCORPORATION OF
Financial Exchange Company of Ohio, Inc.
-----------------------------------------------------------------
(Name of Corporation)
( ) Chairman of the Board
Edward R. Larkin , who is (x) President (check one)
-------------------------
( ) Vice President
and Howard Topol Roberts, who is (x) Secretary (check one)
---------------------
( ) Assistant Secretary
of the above named Ohio corporation for profit with its principal
location at 1370 Ontario Street, Cleveland, Ohio do hereby certify
that (check the appropriate box and complete the appropriate
statements)
[ ] a meeting of the shareholders was duly called and held on
_______________________, 19__, at which meeting a quorum of
the shareholders was present in person or by proxy, and by
the affirmative vote of the holders of shares entitling them
to exercise ____________% of the voting power of the
corporation,
[X] in a writing signed by all of the shareholders who would be
entitled to a notice of a meeting held for that purpose,
the following resolution was adopted to amend the articles:
Article Second of the Articles of Incorporation is amended in its
entirety to read as follows:
<PAGE>
SECOND. The place in Ohio where its principal
office is to be located is 1370 Ontario Street,
Cleveland, Cuyahoga County.
IN WITNESS WHEREOF, the above named officers acting for and
on behalf of the corporation, have subscribed their names this 8th day
of April, 1986.
/s/ Edward R. Larkin
------------------------------
President
/s/ Howard Topol Roberts
------------------------------
Secretary
NYFS06...:\47\41847\0008\1710\CRTD136P.530
Exhibit 3.1(r)(i)
<PAGE>
COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF STATE
CORPORATION BUREAU
In compliance with the requirements of section 204 of the
Business Corporation Law, act of May 5, 1933 (P.L. 364) (15 P.S.
Section 1204) the undersigned desiring to be incorporated as a business
corporation, hereby certifies (certify) that:
1. The names of the corporation is UNIVERSAL MONEY EXCHANGE, INC.
2. The location and post office address of the initial registered
office of the corporation in this Commonwealth is: 2400 Two Girard
Plaza, Philadelphia PA 19102
3. The corporation is incorporated under the Business Corporation
Law of the Commonwealth of Pennsylvania for the following purpose or
purposes: To engage in and do any lawful act concerning any or all
lawful business for which corporations may be incorporated under this
act.
4. The terms for which the corporation is to exist is perpetual.
5. The aggregate number of shares which the corporation shall have
authority to issue is: One Thousand (1,000) shares of capital stock
without par value.
6. The name and post office address of each incorporator and the
number and class of shares subscribed by such incorporator(s) is
(are):
<PAGE>
Number and
Name Address Class of Shares
Virginia Zuccari 2400 Two Girard Plaza 1
Philadelphia, PA 19102
IN TESTIMONY WHEREOF, the incorporator(s) has (have) signed
and sealed these Articles of Incorporation this 3rd day of October,
1978.
_________________________(SEAL) /s/ Virginia Zuccari(SEAL)
--------------------
____________________(SEAL)
<PAGE>
COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF STATE
TO ALL TO WHOM THESE PRESENTS SHALL COME, GREETING:
WHEREAS, Under the provisions of the Business Corporation
Law, approved the 5th day of May, Anno Domini one thousand nine
hundred and thirty-three, P.L. 364, as amended, the Department of
State is authorized and required to issue a
CERTIFICATE OF INCORPORATION
evidencing the incorporation of a business corporation organized under
the terms of the that law, and
WHEREAS, The stipulation and conditions of that law have
been fully complied with by the persons desiring to incorporate as
UNIVERSAL MONEY EXCHANGE, INC.
THEREFORE, KNOW YE, That subject to the Constitution of this
Commonwealth and under the authority of the Business Corporation Law,
I do by these presents, which I have caused to be sealed with the
Great Seal of the Commonwealth, create, erect, and incorporate the
incorporators of and the subscribers to the shares of the proposed
corporation named above, their associates and successors, and also
those who may thereafter become subscribers or holders of the shares
of such corporation, into a body politic and corporate in deed and in
law by the name chosen hereinbefore specified, which shall exist
perpetually and shall
<PAGE>
be invested with and have and enjoy all the powers, privileges, and
franchises incident to a business corporation and be subject to all
the duties, requirements, and restrictions specified and enjoined in
and by the Business Corporation Law and all other applicable law of
this Commonwealth.
GIVEN under my Hand and the Great Seal of
the Commonwealth, at the City of
Harrisburg, this 4th day of October
in the year of our Lord one
thousand nine hundred and seventy-
eight and of the Commonwealth the
two hundred and third.
/s/ Barton A. Fields
-----------------------------
Secretary of the Commonwealth
Exhibit 3.1(r)(ii)
<PAGE>
COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF STATE
CORPORATION BUREAU
In compliance with the requirements of section 806 of the
Business Corporation Law act of May 5, 1933 (P.L. 364) (15 P.S. Section
1806) the undersigned corporation desiring to amend its Articles does
hereby certify that
1. The name of the corporation is:
UNIVERSAL MONEY EXCHANGE, INC
-------------------------------------------------------------
2. The location of its registered office in this Commonwealth is
(the Department of State is hereby authorized to correct the following
statement to conform to the records of the Department):
2400 Two Girard Plaza
-----------------------------------------------------------
(Number) (Street)
Philadelphia Pennsylvania 19102
-----------------------------------------------------------
(City) (Zip Code)
3. The statute by or under which it was incorporated is:
Pennsylvania
-----------------------------------------------------------
4. The date of its incorporation is: October 4, 1978
--------------------
5. (Check, and if appropriate complete one of the following)
[_] The meeting of the shareholders of the corporation at
which the amendment was adopted was held at the time and place
<PAGE>
and pursuant to the kind and period of notice herein stated.
Time: The ______________ day of _________________, 19__.
Place: ______________________________________________
Kind and period of notice ________________________________
__________________________________________________________
[_] The amendment was adopted by a consent in writing,
setting forth the action so taken, signed by all of the shareholders
entitled to vote thereon and filed with the Secretary of the
corporation.
6. At the time of the action of shareholders:
(a) The total number of shares outstanding was:
1,000
------------------------------------------------------------
(b) The number of shares entitled to vote was:
1,000
-----------------------------------------------------------
7. In the action taken by the shareholders
(a) The number of shares voted in favor of the amendment was:
1,000
-----------------------------------------------------------
(b) The number of shares voted against the amendment was:
-0-
-----------------------------------------------------------
8. The amendment adopted by the shareholders, set forth in full, is
as follows:
S E E A T T A C H E D
<PAGE>
IN TESTIMONY WHEREOF, the undersigned corporation has caused
these Articles of Amendment to be signed by a duly authorized officer
and its corporate seal, duly attested by another such officer, to be
hereunto affixed this 20th day of December 1978
---- --------
UNIVERSAL MONEY EXCHANGE, INC.
------------------------------
(Name of Corporation)
Attest:
[signature illegible] By:[signature illegible]
--------------------------- ---------------------------
(Signature) (Signature)
Secretary President
---------------------------- ------------------------------
(Title Secretary, Assistant (Title President, Vice
Secretary, etc.) President, etc.)
(CORPORATE SEAL)
INSTRUCTIONS FOR COMPLETION OF FORM
A. Any necessary copies of Form DSCB: 17.2 (Consent to
Appropriation of Name) or Form DSCB:17.3 (Consent to Use of
Similar Name) shall accompany Articles of Amendment
effecting a change of name.
B. Any necessary governmental approvals shall accompany this
form.
C. Where action is taken by partial written consent pursuant to
the Articles, the second alternate of Paragraph 5 should be
modified accordingly.
D. If the shares of any class were entitled to vote as a class,
the number of shares of each class so entitled
<PAGE>
and the number of shares of all other classes entitled to
vote should be set forth in Paragraph 6(b).
E. If the shares of any class were entitled to vote as a class,
the number of shares of such class and the number of shares
of all other classes voted for and against such amendment
respectively should be set forth in Paragraphs 7(a) and
7(b).
F. BCL Section 807 (15 P.S. Section 1807) requires that the
corporation shall advertise its intention to file or the
filing of Articles of Amendment. Proofs of publication of
such advertising should not be delivered to the Department,
but should be filed with the minutes of the corporation.
Exhibit 3.1(r)(iii)
<PAGE>
Article 1 of the Articles of Incorporation of the corporation,
relating to the name of the corporation, is hereby amended to read in
its entirety as follows:
"1. The name of the corporation is:
Financial Exchange Company of Pennsylvania, Inc."
Article 5 of the Articles of Incorporation of the corporation,
relating to authorized shares of the corporation, is hereby amended to
read in its entirety as follows:
"5. The aggregate number of shares which the corporation
shall have authority to issue is: One thousand (1,000)
shares of capital stock, par value Five Hundred Dollars
($500.00) per share."
Article 7 of the Articles of Incorporation of the corporation,
relating to cumulative voting, is hereby added to read in its entirety
as follows:
"7. No holder of any class of shares of the corporation
shall be entitled to cumulate his votes at any election
of directors."
Article 8 of the Articles of Incorporation of the corporation,
relating to pre-emptive rights of shareholders, is hereby added to
read in its entirety as follows:
"8. Shareholders of the corporation shall have no pre-
emptive right to acquire additional, unissued, or
treasury shares of the corporation."
<PAGE>
COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF STATE
TO ALL TO WHOM THESE PRESENTS SHALL COME, GREETING:
WHEREAS, In and by Article VIII of the Business Corporation Law,
approved the fifth day of May, Anno Domini one thousand nine hundred
and thirty-three, P.L. 364, as amended, the Department of State is
authorized and required to issue a
CERTIFICATE OF AMENDMENT
evidencing the amendment of the Articles of Incorporation of a
business corporation organized under or subject to the provisions of
that Law, and
WHEREAS, The stipulations and conditions of that Law pertaining
to the amendment of Articles of Incorporation have been fully complied
with by
UNIVERSAL MONEY EXCHANGE, INC.
name changed to
FINANCIAL EXCHANGE COMPANY OF PENNSYLVANIA, INC.
THEREFORE, KNOW YE, That subject to the Constitution of this
Commonwealth and under the authority of the Business Corporation Law,
I do by these presents, which I have caused to be sealed with the
Great Seal of the Commonwealth, extend the rights and powers of the
corporation named above, in accordance with the terms and provisions
of the Articles of Amendment presented by it to the Department of
State, with full power and authority to use
NYFS06...:\47\41847\0008\1710\FRMD146C.160
<PAGE>
and enjoy such rights and powers, subject tot all the provisions and
restrictions of the Business Corporation Law and all other applicable
laws of this Commonwealth.
GIVEN under my Hand and the Great Seal of the
Commonwealth, at the City of Harrisburg,
this 13th day of February in the year of
our Lord one thousand nine hundred and
seventy-nine and of the Commonwealth the
two hundred and third
/s/ Barton A. Fields
--------------------------------
Acting Secretary of the
Commonwealth
NYFS06...:\47\41847\0008\1710\FRMD146C.160
Exhibit 3.1(s)(i)
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 06/11/1990
710162014 - 2232965
CERTIFICATE OF INCORPORATION
OF
FINANCIAL EXCHANGE COMPANY OF PITTSBURGH, INC.
The undersigned, for the purpose of organizing a corporation
pursuant to the provisions of the General Corporation Law of the State
of Delaware, does make and file this Certificate of Incorporation and
does hereby certify as follows:
FIRST: Name. The name of the corporation is FINANCIAL
----- ----
EXCHANGE COMPANY OF PITTSBURGH, INC. (hereinafter referred to as the
"Corporation").
SECOND: Registered Office. The registered office of the
------ -----------------
Corporation is to be located in the City of Wilmington, County of New
Castle, in the State of Delaware. The name of its registered agent is
the Corporation Service Company, whose address is 1013 Centre Road,
Wilmington, Delaware 19805.
THIRD: Purposes. The purpose of the Corporation is to
----- --------
engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of the State of Delaware.
<PAGE>
FOURTH: Capital Stock. The total number of shares which
------ -------------
the Corporation shall have authority to issue shall be One Thousand
(1,000) shares of the par value of One Cent ($.01) each, all of which
shall be Common Stock.
FIFTH: Incorporator. The name and mailing address of the
----- ------------
incorporator is:
Name Mailing Address
---- ---------------
Colleen A. Keating c/o Spengler Carlson Gubar
Brodsky & Frischling
520 Madison Avenue
New York, NY 10022
SIXTH: Board of Directors and By-Laws. All corporate
----- ------------------------------
powers shall be exercised by the Board of Directors, except as
otherwise provided by statute or by this Certificate of Incorporation,
or any amendment thereof, or by the By-Laws. Directors need not be
elected by written ballot. The By-Laws may be adopted, amended or
repealed by the Board of Directors of the Corporation, except as
otherwise provided by law, but any by-law made by the Board of
Directors is subject to amendment or repeal by the stockholders of the
Corporation.
SEVENTH: Limited Liability. A director of the Corporation
-------- -----------------
shall not be personally liable to the Corporation or its stockholders
for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of
loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or
<PAGE>
which involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the Delaware General Corporation law, or
(iv) for any transaction from which the director derived any improper
personal benefit. If the Delaware General Corporation Law is
hereafter amended to authorize corporate action further eliminating or
limiting the personal liability of directors, then the liability of a
director of the Corporation shall be eliminated or limited to the
fullest extent permitted by the Delaware General Corporation Law, as
so amended.
Any repeal or modification of the foregoing paragraph by the
stockholders of the Corporation shall not adversely affect any right
or protection of a director of the Corporation existing at the time of
such repeal or modification.
EIGHTH: Indemnification. The Corporation shall indemnify
------ ---------------
any person who was or is a party or is threatened to be made a party
to any threatened, pending or complete action, suit or proceeding,
whether civil, criminal, administrative or investigative, or by or in
the right of the Corporation to procure judgment in its favor, by
reason of the fact that he is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and
<PAGE>
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the Corporation, in accordance with and to
the full extent permitted by statute. Expenses incurred in defending
a civil or criminal action, suit or proceeding may be paid by the
Corporation in advance of the final disposition of such action, suit
or proceeding as authorized by the Board of Directors in the specific
case upon receipt of an undertaking by or on behalf of the director,
officer, employee or agent to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified by the
Corporation as authorized in this section. The indemnification
provided by this section shall not be deemed exclusive of any other
rights to which those seeking indemnification may be entitled under
these Articles or any agreement or vote of stockholders or
disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding
such office, and shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of
the heirs, executors and administrators of such a person.
<PAGE>
IN WITNESS WHEREOF, I, the undersigned, being the
incorporator hereinbefore named, hereby declare and certify that the
facts herein stated are true, and accordingly have hereunto set my
hand this 11th day of June, 1990.
/s/ Colleen A. Keating
------------------------------
Colleen A. Keating,
Incorporator
NYFS06...:\47\41847\0008\1710\CRTD146D.020
Exhibit 3.1(t)(i)
<PAGE>
CERTIFICATE OF INCORPORATION
OF
FINANCIAL EXCHANGE COMPANY OF VIRGINIA, INC.
The undersigned, for the purpose of organizing a corporation
pursuant to the provisions of the General Corporation Law of the State
of Delaware, does make and file this Certificate of Incorporation and
does hereby certify as follows:
FIRST: Name. The name of the corporation is FINANCIAL
----- ----
EXCHANGE COMPANY OF VIRGINIA, INC. (hereinafter referred to as the
"Corporation").
SECOND: Registered Office. The registered office of the
------ -----------------
Corporation is to be located in the City of Wilmington, County of New
Castle, in the State of Delaware. The name of its registered agent is
the The Company Corporation, whose address is 725 Market Street,
Wilmington, Delaware 19801.
THIRD: Purposes. The purpose of the Corporation is to
----- --------
engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of the State of Delaware.
FOURTH: Capital Stock. The total number of shares which
------ -------------
the Corporation shall have authority to issue shall be One Thousand
(1,000) shares of the par value of One Cent ($.01) each, all of which
shall be Common Stock.
<PAGE>
FIFTH: Incorporator. The name and mailing address of the
----- ------------
incorporator is:
Name Mailing Address
---- ---------------
Colleen A. Keating c/o Spengler Carlson Gubar
Brodsky & Frischling
520 Madison Avenue
New York, NY 10022
SIXTH: Compromise. Whenever a compromise or arrangement is
----- ----------
proposed between this Corporation and its creditors or any class of
them and/or between this Corporation and its stockholders or any class
of them, any court of equitable jurisdiction within the State of
Delaware may, on the application in a summary way of this Corporation
or of any creditor or stockholder thereof or on the application of any
receiver or receivers appointed for this Corporation under the
provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers
appointed for this Corporation under the provisions of Section 279 of
Title 8 of the Delaware Code, order a meeting of the creditors or
class of creditors, and/or of the stockholders or class of
stockholders of this Corporation, as the case may be, to be summoned
in such manner as the said court directs. If a majority in number
representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization
<PAGE>
of this Corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said
application has been made, be binding on all the creditors or class of
creditors, and/or on all the stockholders or class of stockholders, of
this Corporation, as the case may be, and also on this Corporation.
SEVENTH: Board of Directors and By-Laws. All corporate
------- ------------------------------
powers shall be exercised by the Board of Directors, except as
otherwise provided by statute or by this Certificate of Incorporation,
or any amendment thereof, or by the By-Laws. Directors need not be
elected by written ballot. The By-Laws may be adopted, amended or
repealed by the Board of Directors of the Corporation, except as
otherwise provided by law, but any by-law made by the Board of
Directors is subject to amendment or repeal by the stockholders of the
Corporation.
EIGHTH: Limited Liability. A director of the Corporation
------ -----------------
shall not be personally liable to the Corporation or its stockholders
for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of
loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, (iii) under Section 174 of the Delaware
General Corporation
<PAGE>
Law, or (iv) for any transaction from which the director derived any
improper personal benefit. If the Delaware General Corporation Law is
hereafter amended to authorize corporate action further eliminating or
limiting the personal liability of directors, then the liability of a
director of the Corporation shall be eliminated or limited to the
fullest extent permitted by the Delaware General Corporation Law, as
so amended.
Any repeal or modification of the foregoing paragraph by the
stockholders of the Corporation shall not adversely affect any right
or protection of a director of the Corporation existing at the time of
such repeal or modification.
NINTH: Indemnification. The Corporation shall indemnify
----- ---------------
any person who was or is a party or is threatened to be made a party
to any threatened, pending or complete action, suit or proceeding,
whether civil, criminal, administrative or investigative, or by or in
the right of the Corporation to procure judgment in its favor, by
reason of the fact that he is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he
<PAGE>
acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Corporation, in accordance
with and to the full extent permitted by statute. Expenses (including
attorneys' fees) incurred in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid
by the Corporation in advance of the final disposition of such action,
suit or proceeding as authorized by the Board of Directors in the
specific case upon receipt of an undertaking by or on behalf of the
director, officer, employee or agent to repay such amount unless it
shall ultimately be determined that he is entitled to be indemnified
by the Corporation as authorized in this section. The indemnification
provided by this section shall not be deemed exclusive of any other
rights to which those seeking indemnification may be entitled under
these Articles or any agreement or vote of stockholders or
disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding
such office, and shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of
the heirs, executors and administrators of such a person.
<PAGE>
IN WITNESS WHEREOF, I, the undersigned, being the
incorporator hereinbefore named, hereby declare and certify that the
facts herein stated are true, and accordingly have hereunto set my
hand this 17th day of December, 1991.
/s/ Colleen A. Keating
-----------------------------------
Colleen A. Keating, Incorporator
NYFS06...:\47\41847\0008\1710\CRTD136M.240
Exhibit 3.1(u)(i)
<PAGE>
ARTICLES OF INCORPORATION
OF L.M.S. DEVELOPMENT CORPORATION
We, the undersigned incorporators desiring to form a
corporation under the laws of the State of Arizona, adopt the
following Articles of Incorporation.
ARTICLE I
----------
The name of the corporation shall be:
L.M.S. DEVELOPMENT CORPORATION
ARTICLE II
-----------
The incorporators of the corporation are: Larry M.
Senderhauf, 3333 East Camelback Road, #212, Phoenix, Arizona 85018 and
Elizabeth S. Senderhauf, 3333 East Camelback Road, #212, Phoenix,
Arizona 85018. All powers, duties and responsibilities of the
incorporators shall cease at the time of delivery of these Articles of
Incorporation to the Arizona Corporation Commission for filing.
ARTICLE III
------------
The corporation initially intends to conduct the business of
operating check cashing stores.
ARTICLE IV
-----------
The purpose for which this corporation is organized is the
transaction of any or all lawful business for which corporations may
be incorporated under the laws of the State of Arizona as they may be
amended from time to time.
<PAGE>
ARTICLE V
----------
The total authorized shares of the corporation shall be One
Million (1,000,000) common shares, no par value per share.
The shares of this corporation may be issued for cash
services or property, upon such conditions and terms as may be
determined by the Board of directors, who shall have full power and
authority to fix the value of the property or services for which
shares may be issued and whose valuations shall be conclusive and the
shares so issued shall be fully paid and non-assessable.
The Board of Directors may from time to time cause the
corporation to purchase its own shares to the extent of the unreserved
and unrestricted earned and capital surplus of the corporation.
ARTICLE VI
-----------
The affairs of the corporation shall be conducted by a Board
of Directors, the number of which shall be determined at the annual
meeting of the shareholders in the manner specified in the By-Laws of
the corporation. Directors shall be elected at the annual meeting of
the shareholders to be held at such time as may be provided in the By-
Laws of the corporation, and such Directors shall serve until their
successors are elected and qualified. The following persons shall
comprise the initial Board of Directors, who shall serve until their
successors are
<PAGE>
elected and qualified: Larry M. Senderhauf, 3333 East Camelback Road,
#212, Phoenix, Arizona 85018 and Elizabeth S. Senderhauf, 3333 East
Camelback Road, #212, Phoenix, Arizona 85018.
ARTICLE VII
------------
The private property of the shareholders, directors and
officers of this corporation shall be forever exempt from corporate
debts and liabilities.
ARTICLE VIII
-------------
EWB, Inc., an Arizona corporation, with offices at 4722
North 24th Street, Court Two, Suite 350, Phoenix, Arizona, 85016, is
hereby appointed the initial statutory agent of the corporation. The
Board of Directors of this corporation may revoke this appointment of
agent at any time and shall have power to fill any vacancy in such
position.
IN WITNESS WHEREOF the incorporators have hereunto set their
hands this 8th day of January, 1988.
---
/s/ Larry M. Senderhauf
----------------------------------------
Larry M. Senderhauf
/s/ Elizabeth S. Senderhauf
----------------------------------------
Elizabeth S. Senderhauf
NYFS06...:\47\41847\0008\1710\TABD136M.150
Exhibit 3.1(v)(i)
<PAGE>
ARTICLES OF INCORPORATION-FOR PROFIT
DSCB:15-1306/2102/2303/2702/2903/7102A (Rev 90)
Indicate type of domestic corporation (check one):
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
X Business-stock (15 Pa.C.S. Section 1306) Management (15 Pa.C.S. Section 2702)
--- ---
Business-nonstock (15 Pa.C.S. Section 2102) Management (15 Pa.C.S. Section 2903)
--- ---
Business-statutory close (15 Pa.C.S. Section 2303) Cooperative (15 Pa.C.S. Section 7102A)
--- ---
</TABLE>
In compliance with the requirements of the applicable provisions of 15
Pa.C.S. (relating to corporations and incorporated associations) the
undersigned, desiring to incorporate a corporation for profit hereby
state(s) that:
1. The name of the corporation is: MONETARY MANAGEMENT CORP.
2. The (a) address of this corporation's initial registered office in
this Commonwealth or (b) name of its commercial registered office
provider and the county of venue is:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
(a) c/o Brian J. Sisko, Esquire, 1401 Walnut Street Philadelphia Pennsylvania 19102 Philadelphia
Number and Street City State Zip County
(b) c/o:
Name of Commercial Registered Office Provider County
</TABLE>
For a corporation represented by a commercial registered office
provider, the county in (b) shall be deemed the county in which the
corporation is located for venue and official publication purposes.
3. The corporation is incorporated under the provisions of the
Business Corporation Law of 1988, as amended.
4. The aggregate number of shares authorized is: 100 shares, $.01
par value
5. The name and address, including street and number, if any, of
each incorporator is:
Name Address
Steven C. Bravato Klehr, Harrison, Harvey, Branzburg & Ellere,
1401 Walnut Street, 8th Floor, Philadelphia, PA 19102
6. The specified effective date, if any is:
<PAGE>
----------------------------------------------
month day year hour, if any
7. Any additional provisions of the articles, if any, attach an 8
1/2 x 11 sheet.
8. Statutory close corporation only: Neither the corporation nor
any shareholder shall make an offering of any of its shares of
any class that would constitute a "public offering" within the
meaning of the Securities Act of 1933 (15 U.S.C. Section 77a et seq.).
9. Cooperative corporations only: (Complete and strike out
inapplicable term). The common bond of membership among its
members/shareholders is:
IN TESTIMONY whereof, the sole incorporator has signed these
Articles of Incorporation this 9th day of January, 1995.
/s/ Steven C. Bravato
----------------------------------------
Steven C. Bravato, Sole Incorporator
NYFS06...:\47\41847\0008\1710\ARTD136L.280
Exhibit 3.1(x)(i)
<PAGE>
ARTICLES OF INCORPORATION
OF
MONETARY MANAGEMENT OF CALIFORNIA, INC.
* * * * *
FIRST: That the name of the corporation is
MONETARY MANAGEMENT OF CALIFORNIA, INC.
SECOND: The purpose of this corporation is to engage in any
lawful act or activity for which a corporation may be organized under
the General Corporation Law of California other than the banking
business, the trust company business or the practice of a profession
permitted to be incorporated by the California Corporations Code.
THIRD: The name of this corporation's initial agent for
service of process in the State of California is:
C T CORPORATION SYSTEM
FOURTH: The total number of shares which the corporation is
authorized to issue is twenty thousand (20,000) of the par value of
One Dollar ($1.00) each.
FIFTH: The name and address of each person appointed to act
as initial director is as follows:
<PAGE>
NAME ADDRESS
---- -------
JOHN T. GORMAN 345 Hudson Street
New York, New York 10014
EDWARD R. LARKIN 401 Parkway Boulevard
Broomall, Pennsylvania 19008
MORRIS WEISSMAN 345 Hudson Street
New York, New York 10014
IN WITNESS WHEREOF, the undersigned have executed these
Articles this 29th day of October, 1986.
/s/
------------------------------
John T. Gorman, Director
/s/
------------------------------
Edward R. Larkin, Director
/s/
------------------------------
Morris Weissman, Director
<PAGE>
We hereby declare that we are the persons who executed the
foregoing Articles of Incorporation, which execution is our act and
deed.
/s/ John T. Gorman
-------------------------
John T. Gorman, Director
/s/ Edward R. Larkin
--------------------------
Edward R. Larkin, Director
/s/ Morris Weissman
-------------------------
Morris Weissman, Director
NYFS06...:\47\41847\0008\1710\ARTD136K.040
Exhibit 3.1(y)(i)
<PAGE>
ARTICLES OF INCORPORATION
OF
MONETARY MANAGEMENT MART OF MARYLAND, INC.
------------------------------------------
The undersigned, being a natural person of the age of 18
years or older, does hereby act as incorporator for the purpose of
incorporating a business corporation under the General Laws of the
State of Maryland.
FIRST: The name of the corporation (hereinafter called the
-----
"Corporation") is Monetary Management Mart of Maryland, Inc.
SECOND: The post office address of the principal office of
------
the Corporation in the State of Maryland is c/o The Corporation Trust
Incorporated, 32 South Street, Baltimore, Maryland 21202. The name of
the registered agent in this State is The Corporation Trust
Incorporated, a corporation of this State, and the post-office address
of the resident agent is 32 South Street, Baltimore, Maryland 21202.
THIRD: The Corporation has as its purpose the engaging in
-----
any lawful business for which corporations may be incorporated under
the Maryland General Corporation Law, as from time to time amended or
supplemented.
FOURTH: The aggregate number of shares that the Corporation
------
shall have authority to issue is 100, all of one class, of the par
value of $0.01 each and of the aggregate par value of One Dollar
($1.00).
FIFTH: The duration of the corporation shall be perpetual.
-----
SIXTH: In furtherance and not in limitation of the powers
-----
conferred by law, the board of directors of the Corporation is
expressly authorized to make, alter or repeal the By-laws of the
Corporation, but any By-laws adopted by the board of directors may be
amended or repealed by the stockholders entitled to vote thereon.
Election of directors need not be by written ballot.
SEVENTH: Notwithstanding any provisions in the By-laws to
-------
the contrary, each shareholder shall have one vote for each
<PAGE>
share entitled to vote on matters to be decided by a vote of the
shareholders. Subject to the provisions of the Maryland General
Corporation Law, there shall be no cumulative voting for the election
of directors.
EIGHTH: A director shall not be personally liable to the
------
Corporation or its shareholders for damages for any breach of duty as
a director, except for any matter in respect of which such director
shall be liable by reason that, in addition to any and all other
requirements for such liability, there shall have been a judgment or
other final adjudication adverse to such director that establishes
that such director's acts or omissions were in bad faith or involved
intentional misconduct or a knowing violation of law or that such
director personally gained in fact a financial profit or other
advantage to which such director was not legally entitled. Neither
the amendment nor the repeal of this Article shall eliminate or reduce
the effect of this Article in respect to any matter occurring, or any
cause of action, suit or claim that, but for this Article, would
accrue or arise, prior to such amendment, repeal or adoption of an
inconsistent provision.
NINTH: The Corporation shall indemnify, to the fullest
-----
extent permitted by the Maryland General Corporation Law, as the same
may be amended or supplemented from time to time, all persons whom it
is permitted to indemnify pursuant thereto.
TENTH: The number of directors of the Corporation shall be
-----
two (2), which may be changed in accordance with the By-laws of the
Corporation. The names of the directors who shall act until the first
annual meeting or until their successors are duly chosen and qualify
are:
Jeffrey A. Weiss Donald F. Gayhardt
ELEVENTH: The principal office of this Corporation is c/o
--------
Dollar Financial Group, 1436 Lancaster Avenue, Suite 210, Berwyn,
Pennsylvania 19312.
<PAGE>
IN WITNESS WHEREOF, the undersigned has duly executed these
Articles of Incorporation on this 31st day of January, 1996.
/s/ John J.M. Selig
------------------------------
John J.M. Selig
Sole Incorporator
NYFS06...:\47\41847\0008\1710\ARTD126L.070
Exhibit 3.1(z)(i)
<PAGE>
CERTIFICATE OF INCORPORATION
OF
Monetary Management of New York, Inc.
UNDER SECTION 402 OF THE
BUSINESS CORPORATION LAW
* * * * *
WE, THE UNDERSIGNED, all of the age of eighteen years or
over, for the purpose of forming a corporation pursuant to Section 402
of the Business Corporation Law of New York, do hereby certify:
FIRST: The name of the corporation is
Monetary Management of New York, Inc.
SECOND: The purposes for which it is formed are:
To engage in any lawful act or activity for which
corporations may be organized under the Business Corporation Law,
provided that it is not formed to engage in any act or activity
requiring the consent or approval of any state official, department,
board, agency or other body, without such consent or approval first
being obtained.
THIRD: The office of the corporation is to be located in
the County of New York, State of New York.
<PAGE>
FOURTH: The aggregate number of shares which the
corporation shall have authority to issue is twenty thousand (20,000)
of the par value of One Dollar ($1.00) each.
FIFTH: The Secretary of State is designated as the agent of
the corporation upon whom process against the corporation may be
served. The post office address to which the Secretary of State shall
mail a copy of any process against the corporation served upon him is:
c/o C T Corporation System, 1633 Broadway, New York, New York 10019.
SIXTH: The name and address of the registered agent which
is to be the agent of the corporation upon whom process against it may
be served, are C T CORPORATION SYSTEM, 1633 Broadway, New York, New
York 10019.
IN WITNESS WHEREOF, we have made and signed this Certificate
of Incorporation this 29th day of October, A.D. 1986.
/s/ Dianne Mazzola
----------------------------------------
Diane Mazzola
1633 Broadway,
New York, New York 10019
/s/ Lillian Rosado
----------------------------------------
Lillian Rosado
1633 Broadway,
New York, New York 10019
<PAGE>
STATE OF NEW YORK )
) SS:
COUNTY OF NEW YORK )
On this 29th day of October, 1986, before me personally came
DIANE MAZZOLA and LILLIAN ROSADO, to me known, and known to me to be
the persons described in and who executed the foregoing Certificate,
and they duly acknowledged to me that they had executed the same.
/s/ Timothy E. Carlson
----------------------------------------
Timothy E. Carlson
Notary Public
NYFS06...:\47\41847\0008\1710\TABD116K.160
Exhibit 3.1(aa)(i)
<PAGE>
ARTICLES OF INCORPORATION
OF
PACIFIC RING ENTERPRISES, INC.
The undersigned desiring to form a corporation under
the laws of the State of California declares:
1. The name of this corporation is: PACIFIC RING
ENTERPRISES, INC.
2. The purpose of this corporation is to engage in
any lawful act or activity for which a corporation
may be organized under the General Corporation Law
of the State of California, other than the banking
business, the trust company business or the
practice of a profession permitted to be
incorporated by the California Corporations' Code.
3. The name and address in this state of this
corporation's initial agent for service of process
is:
ARNOLD L. ROSS, ESQ.
9665 Wilshire Boulevard
Eighth Floor
Beverly Hills, California 90212
4. The corporation is authorized to issue 100,000
shares of capital stock all of one class to be
designated "common stock."
<PAGE>
5. Before being offered to ANYONE ELSE, ANY shares,
options or securities having conversion or option
rights issued BY the Board of Directors of this
corporation must first be offered to the
shareholders or the one class of capital stock
issued by this corporation designated "common
stock".
IN WITNESS WHEREOF, the undersigned has executed these Articles
of Incorporation this 25th day of March 1983.
/s/ Barry Leigh Weissman
-------------------------------
BARRY LEIGH WEISSMAN
I hereby declare that I am the person that executed the foregoing
Article of PACIFIC RING ENTERPRISES, INC., and that said Articles
of Incorporation are my own act and deed.
Executed at Beverly Hills, California, this 25th day of March,
1983.
/s/ Barry Leigh Weissman
-------------------------------
BARRY LEIGH WEISSMAN
NYFS06...:\47\41847\0008\1710\ARTD126N.230
Exhibit 3.1(bb)(i)
<PAGE>
LIMITED PARTNERSHIP
CERTIFICATE AND AGREEMENT
CHECK EXCHANGE LIMITED PARTNERSHIP,
AN ARIZONA LIMITED PARTNERSHIP
This Certificate and Agreement of Limited Partnership (the
"Agreement") dated and effective this 1st day of April, 1988
is made and entered into by and between U.S. CHECK EXCHANGE, INC., an
Arizona corporation (hereinafter "General Partner") as the General
Partner, and GOLF WORLD, INC., a California corporation ("Golf
World"), NATIONAL FINANCIAL EXCHANGE, INC., a California corporation
("NFE"), LYNN R. STRATFORD ("Stratford"), LELAND J. BUTTLE ("Buttle"),
AMM DEVELOPMENT, INC., a Corporation ("AMM") as the limited partners
(hereinafter "Limited Partners"). The General Partner and the Limited
Partners may sometimes be referred to herein interchangeably as
"Partner" or "Partners".
WHEREAS, U.S. CHECK EXCHANGE, INC., an Arizona corporation,
holds various assets of a business engaged in the operation of check
cashing and currency exchange and other financial services.
WHEREAS, U.S. CHECK EXCHANGE, INC., an Arizona corporation,
desires to transfer its assets to U.S. CHECK EXCHANGE, an Arizona
limited partnership, as an initial contribution, in exchange for a
general partnership interest therein.
<PAGE>
WHEREAS, U.S. CHECK EXCHANGE, INC., an Arizona corporation,
has executed, on even date herewith, a Bill of Sale to reflect a
transfer of its assets into U.S. CHECK EXCHANGE, an Arizona limited
partnership, as an initial capital contribution, in exchange for a
general partnership interest therein.
NOW THEREFORE, in consideration of the mutual promises
contained herein, the parties hereto do hereby form a limited
partnership (the "Limited Partnership" or "the Partnership") upon the
following terms and conditions.
ARTICLE I.
DEFINITIONS
-----------
The following terms used in this Agreement shall have the
meanings described below:
1.0A. "Act" shall mean the Arizona Statutes governing
Limited partnerships, and interpretations thereof by Arizona case law,
as now in force or from time to time amended.
1.0B. "Assignee" means a person who has acquired a
Limited Partner's beneficial interest in one or more Partnership Units
and has not become a Substituted Limited Partner.
1.0C. "Capital Account" shall mean each Partner's
Capital Contribution increased by any Additional Capital amended by
him to, and by his share of Net Income from, the Partnership and
decreased by his share of Net Loss and distributions made to him by
the Partnership.
<PAGE>
1.0D. "Capital Contribution" shall mean the aggregate of
each Partner's Initial Capital Contributions and any additional
Capital Contributions made by each Partner.
1.0E. "Code" means the Internal Revenue Code of 1954, as
amended.
1.0F. "General Partner" shall mean U.S. CHECK EXCHANGE,
INC., an Arizona corporation, acting in its capacity as General
Partner of the Limited Partnership, or any other person or persons who
succeeds him as General Partner pursuant to the provisions of this
Agreement.
1.0G. "Initial Capital Contribution" shall mean the
capital contribution described in Article 10 hereof.
1.0H. "Limited Partner" shall refer to those persons
executing this Agreement as Limited Partners.
1.0I. "Profits" and "Losses" of the Partnership shall
mean the net profits and net losses of the Partnership as determined
by the certified public accountant serving the Partnership acting in
accordance with generally accepted accounting principles consistently
applied.
1.J. "Partners" shall refer collectively to the General
Partner and to the Limited Partners, and any reference to a "Partner"
shall be to any one of the Partners interchangeably, limited or
general.
<PAGE>
1.K. "Partnership" or "Limited Partnership" shall refer to
the Limited Partnership created under this Agreement.
1.L. "Person" shall mean any natural person, partnership,
joint venture, corporation, estate, trust, association, or other legal
entity.
1.M. "Substituted Limited Partner" shall refer to a person
who has received assignment of an interest in the Partnership by a
Limited Partner and who is admitted to the Partnership with all of the
rights of a Limited Partner pursuant to this Agreement and applicable
law.
1.N. "Transfer" when used in connection with a Unit means
any sale, assignment, hypothecation, pledge, encumbrance or any other
disposition thereof to any Person or any grant to any Person of any
interest in or with respect to a unit or any part thereof.
ARTICLE II.
FORMATION AND NAME
------------------
The Partners hereby form a limited partnership (the
"Partnership") pursuant to the provisions of the Act. The name of the
Partnership shall be "U.S. Check Exchange Limited Partnership", an
Arizona limited partnership.
<PAGE>
ARTICLE III.
GENERAL CHARACTER OF BUSINESS
-----------------------------
The general character and purpose of the business of the
partnership shall be to engage in the operation of a check cashing and
currency exchange business and to provide other financial services to
customers.
ARTICLE IV.
TERM
----
The Partnership shall commence on the date this Agreement is
filed with the Arizona Secretary of State and shall continue for a
period of forty (40) years thereafter unless sooner terminated in
accordance with the terms hereof, or as otherwise provided by law.
ARTICLE V.
SPECIFIED OFFICE
----------------
The Partnership's Specified Office as required by the Act
and principal place of business shall be at 10555 East Firestone
Blvd., Norwalk, California 90650, or at such other place as the
General Partner may, upon five days' prior notice to the Limited
Partners, designate from time to time.
ARTICLE VI.
SPECIFIED AGENT
---------------
The Specified Agent for service of process upon the
Partnership as required by the Act is David H. Colby, whose
<PAGE>
address is 6900 East Indian School Road, Suite 200, Scottsdale,
Arizona 85251.
ARTICLE VII.
NAMES AND BUSINESS ADDRESSES OF PARTNERS
----------------------------------------
The name and business address of the General Partner and
each Limited Partner in paragraph 20.01 hereof.
ARTICLE VIII.
POWER OF ATTORNEY
-----------------
8.0A. General Partner as Attorney-in-Fact. All Limited
-----------------------------------
Partners, individually and collectively, irrevocably constitute and
appoint the General Partner as their true and lawful attorney-in-fact
and empower the General Partner to act for and in their place, name,
and stead to execute, acknowledge, record, deliver, publish, and file,
as may be necessary, this Agreement and certificate, and any
amendments, modifications, or cancellations thereto, which may be
required to effectuate the dissolution and termination of the Limited
Partnership, or any other instruments which the Partnership may be
required to file under the laws of the State or the regulations of any
government agency. If the General Partner so requests, each Partner
shall execute and acknowledge any amendment or modification of this
Agreement and Certificate and such other documents as are required
under the Act or otherwise by law or regulation and are approved by
the Limited Partnership.
<PAGE>
8.0B. Power of Attorney Irrevocable. Each Limited Partner
-----------------------------
acknowledges that the foregoing power of attorney is coupled with an
interest, is irrevocable, and shall survive both the death of any
Limited Partner and/or any assignment by any Limited Partner of his or
her interest.
ARTICLE IX.
TITLE TO PROPERTY
-----------------
Title to any Partnership property shall be held in the name
of the Partnership.
ARTICLE X.
CAPITAL CONTRIBUTIONS
---------------------
10.0A. Initial Capital Contributions.
1. General Partner. The General Partner shall make an
---------------
Initial Capital Contribution to the Partnership equal to the assets
identified in the Bill of Sale and Assignment attached hereto as
Exhibit "A".
2. Limited Partners. The Limited Partners shall make the
following Initial cash Capital Contributions:
Name of Limited Partner Capital Contribution
----------------------- --------------------
Golf World, Inc. $5,000.00
Lynn R. Stratford 865.00
NFE 865.00
Leland Buttle 238.00
AMM Development, Inc. 2,883.00
10.0B. Limited Partner's Liability. The Limited Partners
---------------------------
shall not be liable for any of the debts, obligations,
<PAGE>
or liabilities of the Partnership beyond their contributions of
capital. The Limited Partners shall make an initial contribution to
the capital of the Partnership as identified in paragraph 10.01. The
partners agree that each Limited Partner shall contribute equally such
additional sums as the Partnership may require during the term of the
Agreement to meet its cash needs.
Each Limited Partner shall make any additional capital
contributions to the Partnership no later than ten (10) days following
notice from the General Partner than an additional capital
contribution is required for the Partnership to continue meetings its
business needs. The Partners also acknowledge that additional capital
contributions may be necessary, at the discretion of the General
Partner, for each new business location that is opened by the
Partnership. In the event that additional contributions are made, the
interests of the Partners in the Partnership will be adjusted to
reflect such contributions. No Limited Partners shall be obligated to
make any additional contributions. However, all funding required for
acquisition and expansion of new business locations will be obtained
either from:
1. loans to the Partnership by the General Partner at an
interest rate on terms and conditions agreeable to the Partners
and/or;
<PAGE>
2. a line of credit obtained by the General Partner,
secured by Partnership assets, on terms and conditions agreeable to
the Partners.
10.0C. General Partner's Liability. The General Partner
---------------------------
shall have the same liability for Partnership obligations, debts, and
liabilities as would a General Partner in a General Partnership.
10.0D. No Interest On Contributions. No Partner shall
----------------------------
receive any interest on any Capital Contribution.
10.0E. Withdrawal of Capital. No Partner may withdraw any
---------------------
part of his capital account or receive any distribution from the
Partnership except as provided herein.
ARTICLE XI.
ALLOCATION OF PROFITS AND LOSSES
--------------------------------
11.0A. Capital Accounts.
----------------
1. Each Partner shall have a capital account equal to:
a. The amount of his capital contributions to the
partnership pursuant to this Agreement;
b. Plus an amount of income received from the Partnership,
allocated between the Partners in accordance with paragraph 11.02
hereof;
<PAGE>
c. Less the amount of losses and other expenses of the
Partnership allocated to the Partners in accordance with paragraph
11.02 hereof;
d. Less all amounts distributed to the Partners pursuant
to this Agreement (excluding amounts distributed in repayment of
principal or interest of loans to the Partnership by the Partners and
amounts payable to the Partners as consultant fees).
2. No limited partner shall be obligated to contribute
capital to his capital account.
3. Loans by a Partner to the Partnership shall not be
considered contributions to the capital of the Partnership and shall
not increase the capital account of the lending Partner, nor shall the
repayment of principal or interest of such loans reduce the capital
account of the lending Partner. Nothing herein shall authorize any
loan by a Partner to the Partnership unless otherwise authorized
pursuant to the other provisions of this Agreement.
11.0B. Profits and Losses. Profits and losses of the
------------------
Partnership shall be allocated proportionately between the partners,
ninety nine percent (99%) to the Limited Partners as follows:
<PAGE>
Golf World 50.00%
Stratford 8.65%
NFE 8.65%
Buttle 2.88%
AMM Development, Inc. 28.83%
and one percent (1%) to the general partner U.S. CHECK EXCHANGE, INC.,
an Arizona corporation.
11.0C. Tax Treatment. The partners recognize that part of
-------------
the gains recognized upon a sale or other disposition of Partnership
properties may be treated for federal income tax purposes (as a result
of the application of Sections 1245 or 1250 of the Internal Revenue
Code) as a gain from the sale, exchange, or other disposition of an
asset which is neither a capital asset nor property described in
Section 1231 of the Internal Revenue Code ("Depreciation Recapture").
The Partners agree that, to the extent possible, without increasing
the total gain on such transactions allocated to a Partner in a
particular calendar year, the Depreciation Recapture will be allocated
among the partners in the proportion to their percentage interest in
profits and losses of the Partnership.
11.0D. Distribution of Profits and Losses. At least
----------------------------------
annually, the Partnership shall distribute to the Limited Partners so
much of the cash of the Partnership as is not reasonable necessary for
the efficient operation of the business of the Partnership including,
but not limited to, debt service and business expansion.
<PAGE>
Fifty Percent (50%) of the annual net profits of the
Partnership for any fiscal year of the Partnership shall be
distributed to the Limited Partners. Each distribution of profits
shall be made in accordance with the percentages set forth in
paragraph 11.02 hereof.
ARTICLE XII.
NONCOMPETITION
--------------
12.0A. Non-competition Agreement. During the term of this
-------------------------
Agreement and for the longer of (a) one year from termination of this
Agreement or (b) two and one-half years from the date of execution of
this Agreement, no Limited Partner, nor any person or entity directly
or indirectly owning any interest in any Limited Partner or the
General Partner nor any entity in which any of the foregoing has a
direct or indirect ownership interest shall, without the prior consent
of the General Partner shall own, be employed by, render service to,
make loans to, or otherwise be involved in, any business, other than
the Partnership, providing or involved in the business of cashing
checks or providing any other financial service which the Partnership
has provided or may provide to its customers. The General Partner
shall have no right to deny its consent under the preceding sentence
if all of the following conditions are met: (a) the person or entity
---
seeking consent agrees in writing to a license agreement with Any Kind
Check Cashing Centers, Inc.
<PAGE>
identical to the franchise agreement attached hereto as Exhibit "A"
and (b) the requested consent is limited to a geographical area in
---
which none of the Partnership, Any Kind Check Cashing Centers, Inc.,
or any affiliates, subsidiaries or licensees of those entities is then
conducting a check cashing business or has previously articulated a
plan to open a check cashing business within six (6) months from the
date of articulating the plan and (c) the request included a binding
---
right of first refusal in favor or Any Kind Check Cashing Centers,
Inc. allowing Any Kind Check Cashing Centers, Inc. to match any
financial or other business transactions offered by third parties to
the requesting person or entity relating to the check cashing
business.
12.0B. Geographical Scope. None of the persons or entities
------------------
bound by the provisions of section 12.01 shall open any place of
business for cashing checks or provide other financial services under
any trade name used by the Partnership within a five (5) mile radius
of a previously opened business location of the Partnership or of any
other person bound by the provisions of section 12.01 which uses the
trade name. This non-competition clause shall apply to all activities
and businesses within the United States of America. This section
shall survive the termination of this Agreement and shall be binding
until such time as all partners agree otherwise.
<PAGE>
12.0C. Prohibition On Use of Name. None of the persons or
--------------------------
entities bound by the provisions of section 12.01 shall open any place
of business under the name of Any Kind Check Cashing Centers, Any Kind
Check, Any Kind, American Check Exchange, or American Check, any name
to which any other person has an exclusive right to use under
applicable state or federal law, or any name confusingly similar to
such protected names. None of the persons or entities bound by the
provisions of section 12.01 shall cause the Partnership to violate any
provisions of any franchise agreement that the Partnership will enter
into with Any Kind Check Cashing Centers, Inc., an Arizona
corporation.
12.0D. Remedies. All signatories hereto agree that any
--------
violation by any of them or any covenant contained in this Article 12
will cause irreparable harm, leaving no adequate remedy at law to the
other parties hereto and, for that reason, all signatories hereto
agree that any aggrieved party shall be entitled to an injunction from
any court of competent jurisdiction restraining further violation of
such covenant. The right to an injunctive remedy shall be in addition
to all rights and remedies otherwise available to the aggrieved party
at law or in equity, including but not limited to the recovery of
monetary damages, whether compensatory or punitive.
<PAGE>
ARTICLE XIII.
FISCAL YEAR
-----------
The fiscal year of the Partnership shall end on December 31.
ARTICLE XIV.
MANAGEMENT AND BUSINESS POLICIES
--------------------------------
14.0A. Management of the Partnership. Except as otherwise
-----------------------------
provided in this Agreement, the General Partner shall have the sole
and exclusive right to make all decisions for the Partnership in
respect of the Partnership's business and for overseeing the day-to-
day operations thereof and shall perform such other functions and have
such other responsibilities as are expressly assigned to it in this
Agreement. The Limited Partners shall take no part in the management
of the Partnership, shall have no power to sign for or bind the
Partnership, and, except where expressly provided otherwise in this
Agreement, no consent or approval of the Limited Partners shall be
required for any management decision made by the General Partner
concerning the business of the Partnership.
14.0B. General Partner's Powers. Notwithstanding anything
------------------------
contained in the Act, the General Partner shall have the sole right to
make the following decisions or to take the following actions on
behalf of the Partnership without the consent of the Limited Partners:
<PAGE>
1. Acquire any real or personal property necessary for the
conduct of the Partnership business;
2. Borrow money and as security therefor to mortgage,
pledge, or otherwise place liens upon all or part of any property of
the Partnership;
3. Make any election required or permitted to be made
under the Code for Federal Income tax purposes and under the income
tax laws of the State of Arizona; provided, however, that if any such
tax election has an adverse impact on the Limited Partners with a
concurrent positive effect on the General Partner, then the consent of
the Limited Partners shall be required with respect to any such
election. Without limiting the foregoing, the General Partner is
hereby appointed on behalf of the Limited Partners as the "tax matters
partner" under subchapter C of Chapter 63 of Subtitle A of the Code
and, in addition, shall have the power and authority to consent, on
behalf of al the Partners, to any determination by the Internal
Revenue Service to disallow any deductions, creditors, or their
allowances claimed by the Partnership or include in Partnership gross
income an item of income or gain which the General Partner had
determined is not properly the income or gain of the Partnership;
4. Settle any dispute or litigation involving the
Partnership;
<PAGE>
5. Change the accounting processes or procedures employed
in keeping the books of account or financial statements with respect
to the operation or management of the Partnership;
6. Employ on behalf of the Partnership and at the
Partnership's expense, and upon such terms and for such compensation
as the General Partner shall determine, such persons, firms, or
corporations the General Partner, in its sole discretion, deems
advisable to carry cut the Partnership's purposes;
7. Reimburse itself for expenses, including reasonable
attorneys' fees, incurred in the conduct of the Partnership's business
provided, however, such expenses shall not be in excess of the amount
customarily paid in Los Angeles County, California, for like services.
The burden of establishing that any such expenses are reasonable shall
be upon the General Partner;
8. Employ attorneys, accountants, and others to prosecute
or defend claims by or against the Partnership or affecting title to
any Partnership properties;
9. Offer Partnership property for sale upon such terms and
conditions as the General partner deems reasonable and appropriate;
10. In addition to the specific rights and powers herein
granted, the General Partner shall possess and may enjoy and exercise
all of the rights and powers of general partners as
<PAGE>
are more particularly provided by the Act, except to the extent that
any such rights may be limited or restricted by the express provisions
of this Agreement;
11. Make, execute, or deliver any deed to or agreement to
sell or assign all or any part of the Partnership properties;
12. Sell, transfer or assign any part of or all of the
Partnership assets.
14.0C. Limitation of General Partner's Powers.
--------------------------------------
Notwithstanding anything to the contrary contained in this Agreement,
the General Partner may not without the consent of the partners
holding seventy percent (70%) or more of the profits and loss,
percentage of the partnership as set forth in paragraph 11.02 of this
Agreement:
1. Do any act in contravention of this Agreement;
2. Do any act which would make it impossible to carry on
the business of the Partnership;
3. Use or assign the right or the Partnership in any of
its properties for other than a Partnership purpose;
4. Make, execute or deliver any deed to, or agreement to
sell all or any of the Partnership properties;
5. Execute, deliver, or alter, or otherwise change, any
loan, commitment, note or mortgage;
<PAGE>
6. Borrow or lend money or encumber or use as collateral
any of the Partnership properties except as expressly permitted by
this Agreement;
7. Execute contracts on behalf of the Partnership for
anything other than a Partnership purpose;
8. Alter or amend any provisions of this Agreement;
9. Assign, transfer, or pledge any debts due the
Partnership or release any debts due except on payment in full;
10. Compromise any claim due to the Partnership or submit
to arbitration any dispute or controversy involving the Partnership;
11. Sell, transfer, or assign all or substantially all of
the Partnership assets.
14.0D. Compensation of General Partner. The General
-------------------------------
Partner shall receive, as compensation for services to the
Partnership, one percent (1%) of the net profits of the Partnership.
14.0E. Other Businesses. The General Partner shall devote
----------------
its best efforts and such time as is reasonably necessary to the
management of the Partnership and is prohibited from engaging in
businesses of any nature or description, independently or with others,
which compete directly or indirectly with the Partnership.
<PAGE>
ARTICLE XV.
DUTIES OF GENERAL PARTNER
-------------------------
15.0A. Books and Records. The General Partner shall cause
-----------------
to be maintained, at the Partnership's expense, complete and accurate
books of the Partnership at 1484 Canterbury Court, Lake Arrowhead,
California 92353, or the partnership's principal place of business,
showing all receipts and expenditures, assets and liabilities, income
and loss, and all other records necessary for recording the
Partnership's business and affairs, including a Capital Account for
each Partner. The books of the Partnership shall be kept on a cash
basis and shall be open to inspection, examination, and copying by the
Partners during normal business hours.
15.0B. Bank Accounts. The General Partner shall open and
-------------
maintain in the Partnership's name a Partnership bank account or
accounts, in which shall be deposited all Partnership funds and only
Partnership funds. The funds in the Partnership bank accounts shall
be used solely for the business of the Partnership. Withdrawals from
any Partnership bank account may be made by check or other withdrawal
forms signed by such person or persons as the General Partner may
designate.
15.0C. Reports. The General Partner shall prepare or cause
-------
to be prepared at the Partnership's expense and deliver to each
Partner:
<PAGE>
1. As promptly as practicable and, in any event, within
one hundred and twenty (120) days after the end of each fiscal year, a
balance sheet of the Partnership activities for such year, a statement
of each Partner's Capital Account, a statement of profits and losses
and the sources and applications of monies of the Partnership for such
year, all in reasonable detail, and prepared by a public accountant
selected by the General Partner, together with a statement of such
accountant showing the amount of income, loss, gain, and other items
allocable to each Partner for federal income tax purposes.
2. From time to time, and with reasonable promptness, such
further information available to the General Partner in respect of the
business, affairs and financial condition of the Partnership as any
Partner may reasonable request.
15.0D. Right to Accounting. On demand by any partner, at
-------------------
reasonable time sand intervals, an accounting shall be made by a CPA
firm of the choice of the Partner so demanding the accounting, the
costs thereof to be paid by the Partnership. If such demand is made
more than once in any fiscal year, the costs thereof shall be paid by
the Limited Partners so demanding the same. The accounting shall be
distributed, when completed by the accountant, to all the Partners.
Each Partner shall promptly notify the Partnership in writing of his
approval or disapproval of such accounting within thirty (30) days
after receipt thereof.
<PAGE>
Any Partner's failure to disapprove such accounting within thirty (30)
days after receipt shall be considered approval of all matters
disclosed in such statements and such approval shall be binding and
conclusive on all Partners so approving and any person claiming an
interest in the Partnership by or through such Partner.
15.0E. Tax Matters. The General Partner shall cause to be
-----------
prepared at the Partnership's expense and shall timely file all income
tax returns of the Partnership and shall furnish a copy thereof to
each Partner promptly after the filing thereof.
ARTICLE XVI.
EXPENSES
--------
All of the Partnership's expenses shall be paid by the
Partnership. The costs and expenses payable by the Partnership
include, without limitation, legal and accounting fees, insurance
premiums, taxes, financing costs, organizational costs, and any
brokerage or other fees in connection with sales of partnership
property.
ARTICLE XVII.
DISSOLUTION AND LIQUIDATION
---------------------------
17.0A. Dissolution. The Partnership shall be dissolved
-----------
upon the occurrence of any of the following events:
1. The expiration of the term specified in Article 4 of
this Agreement;
<PAGE>
2. Unanimous consent of all the partners, in writing;
3. The General Partner is removed, resigns, dies, becomes
incapacitated, is adjudged bankrupt, files a petition in bankruptcy,
makes an assignment for the benefit of creditors, or is dissolved,
unless in each case the Limited Partners unanimously elect to continue
as a limited partnership and chose a new General Partner in accordance
with Article 19;
4. The Partnership has disposed of all or substantially
all of its assets and any property acquired in exchange for such
assets;
5. The occurrence of any other event which results in
dissolution of the Partnership under Arizona law.
17.0B. Liquidation and Final Distribution. Upon the
----------------------------------
dissolution of the Partnership under Section 17.01, the General
Partner shall be the Liquidating Partner. If the Dissolution is
caused by an act or circumstance specified in Section 17.01(c), the
Limited Partners shall elect a Liquidating Partner with the approval
of seventy-five percent (75%) or more of the Limited Partnership
interests. The Liquidating Partner shall proceed promptly to wind up
the affairs and business of the Partnership, and shall sell all assets
of the Partnership in a commercially reasonable manner. The Partners
shall continue to share profits and losses during the winding-up in
the same proportion as before
<PAGE>
winding-up. Upon the winding-up of the Partnership, the Partnership
assets shall be distributed as follows:
1. To Creditors, including Partners who are creditors to
the extent permitted by law, in satisfaction of liabilities of the
Limited Partnership, other than liabilities for interim distributions
to Partners provided in A.R.S. Section 29-331 and liabilities for payments
on withdrawal provided in A.R.S. Section 29-334;
2. To Partners and former Partners in satisfaction of
liabilities as creditors not provided for above;
3. To the establishment of any reserves which the
Liquidating Partner may deem necessary for any contingent or
unforeseen liabilities or obligations of the Partnership. Any
remaining balance of such reserves after such period as the
Liquidating Partner in his or her reasonable judgment deems advisable,
shall be distributed in the manner set forth below.
4. To Partners for the return of their contributions to
capital.
5. To Partners in proportion to their percentage rights to
profits and losses of paragraph 10.01.
17.0C. Tax Matters on Dissolution. Any gain or loss on
--------------------------
disposition of Partnership properties during the winding up process
shall be credited or charged to the Partners in the proportion of
their percentage interest in profits and losses of
<PAGE>
paragraph 11.02. Unless otherwise agreed by all Partners, Partnership
property shall be sold for cash at the best available price. If
property is distributed in kind, it shall be valued as though the
property were sold and the cash proceeds distributed. The difference
between the value of property distributed in kind and its book value
shall be treated as a gain or loss on sale of the property and shall
be credited or charged to the Partners in the proportion of their
percentage interest in profits and losses of paragraph 11.01.
17.0D. Payment of Debit Balances. Upon completion of the
-------------------------
winding up process, any debit balance in a Partners income account
shall represent an obligation from that Partner to the other Partners
to be paid in cash within thirty (30) days after written demand by the
other Partners.
ARTICLE XVIII.
TRANSFER OF UNITS AND CONVERSION
--------------------------------
18.0A. Transfers of Limited Partner's Units. No Limited
------------------------------------
Partner may transfer less than his entire interest owned by him, and
no Limited Partner shall sell, transfer, assign, pledge, mortgage, or
otherwise dispose of or encumber his interest in the Partnership
without the prior written consent of the General Partner, except under
the terms of paragraphs 18.04 and 18.05 hereof. Any action taken by a
Limited Partner in
<PAGE>
violation of this Section shall be null and void as against the
Partnership or any Partner.
18.0B. Substituted Limited Partner. No Assignee of a
---------------------------
Limited Partner shall have any rights with respect to the Partnership
unless the Assignee becomes a Substituted Limited Partner in
accordance with this Agreement. If the General Partner and all the
Limited Partners consent to a transfer of a Limited Partner's interest
in writing, an Assignee of a Limited Partner shall become a
Substituted Limited Partner in the Partnership only if and when he
agrees in writing to accept and assume all the terms and provisions of
this Agreement, has executed an Amendment to this Agreement and
Certificate of Limited Partnership and the amendment to this Agreement
and certificate is filed with Arizona Secretary of State. All costs
and expenses incurred by the Partnership in connection with the
transfer of his interest and the substitution of a person as a Limited
Partner, including any filing, recording, or publishing costs and the
fees and disbursements of counsel shall be paid by the substituted
Limited Partner. Failure of an assignee to agree to perform said acts
and pay said costs, shall render such assignee as having only the
rights as an assignee of a Limited Partner's Interest, as are provided
in the Act, and not as a substituted Limited Partner.
<PAGE>
18.0C. Transfers by General Partner. The General Partner
----------------------------
may not transfer its Partnership interest or admit an additional
General Partner without first procuring the prior unanimous written
consent of all the Limited Partners, which consent may be withheld by
the Limited Partners in their sole and absolute discretion.
Notwithstanding the unanimous consent of all of the Limited Partners,
the Substitute General Partner or additional General Partner must
accept and assume all of the terms and provisions of this Agreement.
Failure to so agree or perform said acts by the Substitute General
Partner or additional General Partner renders the transfer or
admission null and void without force or effect. In the case of a
corporation substituted General Partner, a certified copy of the
resolution of its Board of Directors authorizing it to become a
General Partner under the terms and provisions of this Agreement must
be furnished.
18.0D. Right of Corporate Limited Partner to Transfer.
----------------------------------------------
Notwithstanding any of the provisions of Section 18, any Limited
Partner that is a corporation may, without the consent of the other
Partners, transfer all or any portion of its limited partnership
interest in the Partnership to any individual, noncorporate person,
holding an interest, as of the date of execution of this Agreement, in
said transferor Limited Partner,
<PAGE>
if the transferee agrees in writing to be bound by all of the terms of
this Agreement to the same extent as his transferor.
18.0E. Right of First Refusal. Notwithstanding the
----------------------
provisions of Section 18, a Limited Partner may sell, transfer, or
assign its limited partnership interest in the Partnership, without
the prior written consent of the other Partners, if the other partners
fail to exercise their right of first refusal granted in this section
and provided the proposed transfer is to a bona fide offeror. A
Limited Partner desiring to dispose of all or any portion of his
interest in the Partnership ("Transferor Partner") shall give written
notice to the other Partners the identity of the proposed transferee
and all of the other terms and conditions of the proposed disposition.
A bona fide offeror shall be a person or entity financially capable of
carrying out the terms of the offer. Such notice shall constitute an
irrevocable offer by the Transferor Partner to sell the Partnership
interest to the other Partners at the same price and on the same
terms and conditions offered by the prospective transferee. The
Partners receiving the notice shall have forty five (45) days after
receipt of the notice within which to notify the Transferor Partner in
writing of their election to purchase or acquire the offered interest
in the Partnership. If more than one Partner elects to purchase the
offered interest in the Partnership, such accepting Partners shall
purchase the offered
<PAGE>
Partnership interest on a pro-rata basis based upon the accepting
partners respective percentage interest in profits and losses of
paragraph 10.01 hereof. If no Partner elects to purchase the offered
partnership interest within the applicable time period, the Transferor
Partner may dispose of the offered Partnership interest to the
prospective transferee on the same terms and conditions specified in
the notice at any time within sixty (60) days following the forty
fifth (45th) day after the other Partners received the offering
Partner's notice. Failure to close the consummate the transaction
with the prospective transferee within said sixtieth (60th) day
following the forty fifth (45th) day after the other Partners received
notice shall cause the offer to be null and void, thereby requiring
the parties to comply with all the terms of this paragraph as if the
offer had never been made. Any offered Partnership interest disposed
of shall continue to be subject all of the provisions of this
Agreement and each transferee shall, prior to a transfer, and as a
condition to its validity, execute and deliver to the Partnership a
valid and binding agreement to comply with the terms hereof.
ARTICLE XIX.
REMOVAL AND WITHDRAWAL OF THE GENERAL PARTNER
---------------------------------------------
19.0A. Removal. The General Partner may be removed only by
-------
vote of the Limited Partners holding a 51% interest in
<PAGE>
the profits and losses of the Partnership. If the General Partner is
removed, the Partnership shall be dissolved unless the Limited
Partners elect its continuance as provided in Section 19.02 below.
19.0B. Withdrawal of General Partner. If the General
-----------------------------
Partner is removed, resigns, dies, becomes incapacitated, dissolves,
petitions or is the subject of a petition in bankruptcy, or is
adjudged bankrupt, all of which shall constitute an event of
withdrawal, the Partnership shall dissolve. The Partnership shall
thereafter proceed to wind up its affairs unless the Limited Partners
(excluding the withdrawn General Partner) unanimously consent, within
ninety (90) days of the date of an event of withdrawal described
above, to continue the business of the Partnership and to appoint a
Substitute General Partner. Thereafter, notwithstanding the
provisions of Article 19.01, the affairs of the Partnership shall be
continued by the Substitute General Partner as a continuing Limited
Partnership bound by the terms of this Agreement. The continuing
Limited Partnership shall automatically succeed to all of the assets
of the Partnership without further act of the Partners.
19.0C. Former General Partner as Limited Partner. Upon the
-----------------------------------------
removal of the General Partner, and the election by the Limited
Partners to continue the Partnership, the removed General Partner
shall thereafter hold his Partnership interest, if any,
<PAGE>
as a Limited Partner and shall take no further part as a General
Partner in the business of the Partnership. This Agreement shall be
immediately amended to show that such Partner has become a Limited
Partner, and upon the filing of such Amendment, the former General
Partner shall succeed to all of the rights of a Limited Partner
hereunder. The former General Partner shall remain personally liable
for all Partnership obligations incurred while it was a General
Partner.
ARTICLE XX.
MISCELLANEOUS
-------------
20.0A. Notices. All notices, requests, statements, or
-------
other communications required or permitted to be given or furnished
hereunder to a Partner shall be in writing and shall be deemed to have
been properly given or made if hand-delivered or sent by registered
mail, postage prepaid, addressed to the Partner at his address set
forth herein, or at such other address or addresses as a partner may
from time to time designate by notice to the General Partner.
U.S. Check Exchange, Inc., an
Arizona corporation
Mr. George Brimhall
19555 East Firestone Blvd.
Norwalk, California 90650
Golf World, Inc., a California
corporation
<PAGE>
Mr. George Brimhall
10555 East Firestone Blvd.
Norwalk, California 90650
Mr. Lynn Stratford
P.O. Box 1130
Cedar Glen, California 92321
National Financial Exchange, Inc.
P.O. Box 1130
Cedar Glen, California 92321
Leland Buttle
10555 East Firestone Blvd.
Norwalk, California 90650
AMM Development, Inc.
Mr. Thomas Clark
280 South Beverly Drive
Suite 207
Beverly Hills, CA 90212
20.0B. Headings. The headings herein are for convenience
--------
or reference only and shall not affect the meaning or construction
hereof.
20.0C. Severability. Every provision of this Agreement is
------------
intended to be severable. If any term or provision hereof is illegal
or invalid for any reason whatsoever, such illegality or invalidity
shall not affect the validity of the remainder of this Agreement.
20.0D. Governing Law. This Agreement shall be governed by,
-------------
and construed in accordance with, the laws of the State of Arizona.
<PAGE>
20.0E. No Oral Modification. This Agreement may not be
--------------------
changed, terminated, or modified orally or in any manner other than by
a writing signed by all the Partners.
20.0F. Binding on Successors and Assigns. This Agreement
---------------------------------
shall inure to the benefit of and shall be binding upon the successors
and assigns of each of the parties hereof.
20.0G. Cumulative Rights and Remedies. The rights and
------------------------------
remedies provided by this Agreement are cumulative and the use of any
one right or remedy by any Partner shall not preclude or waive his
right to use any or all other remedies. Such rights and remedies are
given in addition to any other rights the Partners may have by law.
20.0H. No Waiver. No waiver by any Partner of any breach
---------
of this Agreement shall constitute a waiver of any other or future
breach of this Agreement.
20.0I. Gender. The use of the masculine gender shall
------
include the feminine and neuter, and the singular shall include the
plural, and vice-versa, where the context so requires.
20.J. Counterparts. This Agreement may be signed in
------------
counterparts and shall have the same force and effect as if all
parties executed one document.
20.K. Attorneys Fees. In the event any partner finds it
--------------
necessary to bring an action at law or other proceedings against any
other part to this Agreement to enforce any of the
<PAGE>
terms, covenants, and conditions hereof, or by reason of any breach or
default hereunder, the party prevailing in any such action or other
proceeding shall be paid by the other part all costs, fees, and
expenses incurred including without limitation, reasonable attorneys'
fees, accounting fees, and costs. In the event any judgment is
secured by such prevailing party, all such costs shall be included in
the judgment.
20.L. Amendment. This Agreement shall not be mended,
---------
altered, changed, or modified except by a written instrument executed
by all partners as of the time of such alteration, amendment, or
modification.
20.M. Entire Agreement. This Agreement contains the entire
----------------
understanding and agreement of the partners with respect to all
matters referred to herein, and all prior negotiations and
understandings are hereby merged into this Agreement. No warranties,
representations, or agreements have been made by any of the partners
except as are contained herein. Without limiting the generality of
the foregoing, each of the partners expressly acknowledges and
confirms that no warranties or representations whatsoever have been
made by any person as to the profits or losses, if any, which may be
derived or suffered by the Partnership or to the amounts, if any,
which may be received hereunder, and that entering into this Agreement
each of them is relying entirely upon his own investigation and good
judgment.
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have duly executed
this Agreement as of the day and year first above written.
GENERAL PARTNER: U.S. CHECK EXCHANGE, INC.,
an Arizona corporation,
By /s/ George H. Brimhall
-------------------------------------
Its President
---------------------------------
LIMITED PARTNERS: GOLF WORLD, INC.
By /s/ George H. Brimhall
-------------------------------------
Its President
---------------------------------
NATIONAL FINANCIAL EXCHANGE, INC.
By /s/ Lynn R. Stratford
-------------------------------------
Its President
---------------------------------
/s/ Lynn R. Stratford
----------------------------------------
LYNN R. STRATFORD
/s/ Leland J. Buttle
----------------------------------------
LELAND J. BUTTLE
AMM DEVELOPMENT, INC.
By: /s/ Thomas Clark
-------------------------------------
Its: President
---------------------------------
<PAGE>
STATE OF CALIFORNIA )
) ss.
County of Los Angeles )
The foregoing instrument was acknowledged before me this
1st day of April, 1988, by U.S. Check Exchange, Inc., an
Arizona corporation by George H. Brimhall its President.
[SEAL] [signature illegible]
----------------------------------------
Notary Public
My Commission Expires:
May 26, 1990
-------------------------
<PAGE>
STATE OF CALIFORNIA )
) ss.
County of Los Angeles )
The foregoing instrument was acknowledged before me this
1st day of April, 1988, by Golf World, Inc. by
George H. Brimhall its President.
[SEAL] [signature illegible]
----------------------------------------
Notary Public
My Commission Expires:
May 26, 1990
-------------------------
STATE OF CALIFORNIA )
) ss.
County of Los Angeles )
The foregoing instrument was acknowledged before me this
1st day of April, 1988, by National Financial Exchange, Inc.
by Lynn Stratford its President.
[SEAL] [signature illegible]
----------------------------------------
Notary Public
My Commission Expires:
May 26, 1990
-------------------------
STATE OF CALIFORNIA )
) ss.
County of Los Angeles )
The foregoing instrument was acknowledged before me this
1st day of April, 1988, by Lynn Stratford.
[SEAL] [signature illegible]
----------------------------------------
Notary Public
My Commission Expires:
May 26, 1990
-------------------------
<PAGE>
STATE OF CALIFORNIA )
) ss.
County of Los Angeles )
The foregoing instrument was acknowledged before me this
1st day of April, 1988, by Leland J. Buttle.
[SEAL] [signature illegible]
----------------------------------------
Notary Public
My Commission Expires:
May 26, 1990
-------------------------
STATE OF CALIFORNIA )
) ss.
County of Los Angeles )
The foregoing instrument was acknowledged before me this
1st day of April, 1988, by AMM DEVELOPMENT INC., By:
Thomas Clark, Its: President.
[SEAL] [signature illegible]
----------------------------------------
Notary Public
My Commission Expires:
May 26, 1990
-------------------------
NYFS06...:\47\41847\0008\1710\RIDD126S.060
Exhibit 3.1(bb)(ii)
<PAGE>
FIRST AMENDMENT TO
CERTIFICATE AND AGREEMENT OF LIMITED PARTNERSHIP
OF
U.S. CHECK EXCHANGE LIMITED PARTNERSHIP
This Agreement is made and entered into this 1st day
of January, 1989, by and between Any Kind Check Cashing
Centers, Inc. (the "General Partner"); and Lynn Stratford,
National Financial Exchange, Inc., Leland J. Buttle, AMM
Development, Inc., and GNS Development Corporation (formerly
known as Golf World, Inc.) (the "Limited Partners").
RECITALS
--------
WHEREAS, by that certain Action By Unanimous Written
Consent of the Board of Directors of U.S. Check Exchange, Inc.
("U.S. Check") dated December 31, 1988, U.S. Check transferred
all of its assets to Golf World, Inc. ("Golf World"); and
WHEREAS, by that certain Action By Unanimous Written
Consent of the Board of Directors of Golf World, dated
December 31, 1988, Golf World accepted the assets of U.S. Check;
and
<PAGE>
WHEREAS, by that certain action By Unanimous Written
Consent of the Board of Directors, Golf World transferred the
assets of U.S. Check which consisted of the general partnership
interest held by Golf World in U.S. Check Exchange Limited
Partnership (the "Limited Partnership") to the General Partner;
and
WHEREAS, by that certain Action by Unanimous Written
Consent of the Board of Directors of the General Partner dated
December 21, 1988, the General Partner accepted the general
partnership interest of Golf World in the Limited Partnership;
and
WHEREAS, the Limited Partners wish to consent to the
transfer of general partnership interest as required by Section
18.01 of Article 18 of the Limited Partnership Agreement of the
Limited Partnership and to accept the General Partner as a
substitute general partner in the Limited Partnership; and
WHEREAS, the General Partner has agreed to accept and
assume all of the terms and provisions of the Certificate and
Agreement of Limited Partnership of the Limited Partnership and
agrees to act in all respects as a substitute general partner.
<PAGE>
NOW, THEREFORE, in consideration of the mutual
covenants and agreements set forth herein the parties agree as
follows:
1. The Limited Partners hereby consent to the
transfer of the general partnership interest in the Limited
Partnership and accept the General Partner as a substitute
general partner.
2. The General Partner hereby agrees to accept, honor
and become contractually obligated and bound by all of the terms
and provisions of the Certificate and Agreement of Limited
Partnership of the Limited Partnership and agrees to act in all
respects as a substitute general partner.
3. The parties hereto, desiring to amend the
Certificate of Agreement of Limited Partnership in accordance
with the requirements of Arizona law, hereby state, pursuant to
the provisions of Arizona revised Statutes Section 29-309, as
follows:
a. The name of the Limited Partnership is U.S. Check
Exchange Limited Partnership;
<PAGE>
b. The Certificate of Limited Partnership of the
Limited Partnership, dated April 1, 1988, was filed in the Office
of the Secretary of the State of Arizona on August 22, 1988,
Certificate No. 20008197 (the "Certificate");
c. Section 1.06 of Article 1 of the Certificate and
Agreement of Limited Partnership of the Limited Partnership is
hereby amended in its entirety to read as follows:
"1.06 'General Partner' shall mean Any Kind
Check Cashing Centers, Inc., an Arizona
corporation, acting in its capacity as
General Partner of the Limited Partnership,
or any other person or persons who succeeds
him as General Partner pursuant to the
provisions of this Agreement."
d. Article 20 of the Certificate and Agreement of
Limited Partnership of the Limited Partnership is hereby amended
in its entirety to read as follows:
"ARTICLE 20
MISCELLANEOUS
-------------
20.01 Notices. All notices, requests,
-------
statements, or other communications required or
permitted to be given or furnished hereunder to a
Partner shall be in writing and shall be deemed to
have been properly given or made if hand-delivered
or sent by registered mail, postage prepaid,
addressed
<PAGE>
to the partner at his address set forth herein, or
at such other address or addresses as a Partner
may from time to time designate by notice to the
General Partner.
Any Kind Check Cashing Centers, Inc., an
Arizona corporation
c/o Mr. George Brimhall
10555 East Firestone Blvd.
Norwalk, CA 90650
GNS Development Corporation, formerly Golf
World, Inc.
c/o Mr. George Brimhall
10555 East Firestone Blvd.
Norwalk, CA 90650
Mr. Lynn Stratford
P.O. Box 1130
Cedar Glen, CA 92321
National Financial Exchange, Inc.
P.O. Box 1130
Cedar Glen, CA 92321
Leland Buttle
10555 East Firestone Blvd.
Norwalk, CA 90650
AMM Development, Inc.
c/o Mr. Thomas Clark
280 South Beverly Drive
Suite 207
Beverly Hills, CA 90212"
4. Except as amended hereby, all terms and provisions
of the Certificate and Agreement of Limited Partnership of the
<PAGE>
Limited Partnership are confirmed and remain in full force and
effect.
IN WITNESS WHEREOF, the undersigned have executed this
First Amendment to Certificate and Agreement of Limited
Partnership this 1st day of January, 1989.
GENERAL PARTNER: LIMITED PARTNERS:
ANY KIND CHECK CASHING
CENTERS, INC.
/s/ Lynn Stratford
-----------------------
LYNN STRATFORD
BY /s/ George H. Brimhall
---------------------------
ITS Vice President
--------------------------
NATIONAL FINANCIAL
EXCHANGE, INC.
BY /s/ Lynn Stratford
---------------------------
ITS President
--------------------------
/s/ Leland Buttle
-----------------------------
LELAND BUTTLE
AMM DEVELOPMENT, INC.
BY /s/ Thomas Clark
----------------------------
ITS President
---------------------------
<PAGE>
GNS DEVELOPMENT CORPORATION
BY /s/ George H. Brimhall
----------------------------
ITS President
---------------------------
NYFS06...:\47\41847\0008\1710\FRMD126Z.270
Exhibit 3.1(bb)(iii)
<PAGE>
SECOND AMENDMENT CERTIFICATE OF LIMITED PARTNERSHIP
1. Name of the Limited Partnership:
U.S. CHECK EXCHANGE LIMITED PARTNERSHIP, an Arizona Limited
------------------------------------------------------------
Partnership
------------------------------------------------------------
2. Date(s) of Filing the original and any prior amended
Certificate of Limited Partnership:
August 22, 1988 (original); December 29, 1989 (first
----------------------------------------------------
amendment)
---------
3. Amendment to Certificate of Limited Partnership:
The list of the limited partners has been amended to provide
------------------------------------------------------------
that GNS Development Corporation, a California corporation
------------------------------------------------------------
(formerly Golf World, Inc., a California corporation)
------------------------------------------------------------
transferred its limited partnership interest to Any Kind
------------------------------------------------------------
Check Cashing Centers, Inc., an Arizona corporation.
------------------------------------------------------------
The current names, business addresses and capital
------------------------------------------------------------
contributions of all the limited partners are set forth on
------------------------------------------------------------
Exhibit A attached hereto.
------------------------------------------------------------
<PAGE>
We hereby declare that we are the persons who executed the
Second Amended Certificate of Limited Partnership, which
execution by our signature below is our act and deed.
GENERAL PARTNER: ANY KIND CHECK CASHING CENTERS, INC.
an Arizona corporation
By /s/ George Brimhall
-----------------------------------
Mr. George Brimhall
Its President
STATE OF CALIFORNIA )
)ss.:
COUNTY OF LOS ANGELES )
SUBSCRIBED AND SWORN to before me this 30th day of
April, 1990, by George Brimhall.
[signature illegible]
____________________________
Notary Public
My Commission Expires:
May 26, 1990
---------------------------
LIMITED PARTNERS: /s/ Lynn R. Stratford
-----------------------
Lynn R. Stratford
STATE OF CALIFORNIA )
)ss.:
COUNTY OF SAN BERNARDINO )
SUBSCRIBED AND SWORN to before me this 25th day of
April, 1990, by [illegible].
[signature illegible]
___________________________
Notary Public
My Commission Expires:
May 26, 1990
---------------------------
<PAGE>
NATIONAL FINANCIAL EXCHANGE, INC.,
a California corporation
------------------
By /s/ Lynn R. Stratford
------------------------
Lynn R. Stratford
Its President
-------------------------------
STATE OF CALIFORNIA )
)ss.:
COUNTY OF SAN BERNARDINO )
SUBSCRIBED AND SWORN to before me this 25th day of
May, 1990, by [illegible].
[signature illegible]
______________________________
Notary Public
My Commission Expires:
August 11, 1992
---------------------------
<PAGE>
/s/ Leland J. Buttle
--------------------------------
Leland J. Buttle
STATE OF CALIFORNIA )
)ss.:
COUNTY OF LOS ANGELES )
SUBSCRIBED AND SWORN to before me this 30th day of
April, 1990, by Leland J. Buttle.
[signature illegible]
_______________________________
Notary Public
My Commission Expires:
May 26, 1990
---------------------------
AMM DEVELOPMENT, INC.,
a corporation
------------------
By /s/ Thomas F. Clark
----------------------
Its President
-------------------------------
STATE OF CALIFORNIA )
)ss.:
COUNTY OF LOS ANGELES )
SUBSCRIBED AND SWORN to before me this 8th day of
May, 1990, by Thomas F. Clark.
[signature illegible]
_______________________________
Notary Public
My Commission Expires:
May 26, 1990
---------------------------
<PAGE>
EXHIBIT A
---------
(Second Amendment Certificate of Limited Partnership)
List of Names, Addresses, and Capital Contributions
of Limited Partner of
U.S. Check Exchange Limited Partnership,
an Arizona limited partnership
Capital
Name Address Contribution
---- ------- ------------
Any Kind Check Cashing 7229 E. First Ave. $5,000.00
Centers, Inc. Suite C
Scottsdale, AZ
85251-4403
Lynn R. Stratford P.O. Box 1130 $ 865.00
Cedar Glen, CA
92321
National Financial P.O. Box 1130 $ 865.00
Exchange, Inc. Cedar Glen, CA
92321
Leland J. Buttle 10555 E. Firestone $ 288.00
Blvd.
Norwalk, CA 90650
AMM Development, Inc. 10555 E. Firestone $2,883.00
Blvd.
Norwalk, CA 90650
NYFS06...:\47\41847\0008\1710\FRMD136F.000
Exhibit 3.2(a)(i)
<PAGE>
MONETARY MANAGEMENT CORPORATION
* * * * *
BY - LAWS
* * * * *
ARTICLE I
OFFICES
Section 1. The office of the corporation shall be located
in the City of New York, County of New York, State of New York.
Section 2. The corporation may also have offices at such
other places both within and without the State of New York as the
board of directors may from time to time determine or the business of
the corporation may require.
ARTICLE II
ANNUAL MEETINGS OF SHAREHOLDERS
Section 1. All meetings of shareholders for the election of
directors shall be held within or without the State Of New York, at
such place as may be fixed from time to time by the board of
directors.
Section 2. Annual meetings of shareholders, commencing with
the year 1981, shall be held on the second Tuesday in May if not a
legal holiday, and if a legal holiday, then on the next secular day
following, at 3:00 P. M., at which they shall elect
<PAGE>
by a plurality vote, a board of directors, and transact such other
business as may properly be brought before the meeting.
Section 3. Written or printed notice of the annual meeting
stating the place, date and hour of the meeting shall be delivered not
less than ten nor more than fifty days before the date of the meeting,
either personally or by mail, by or at the direction of the president,
the secretary, or the officer or persons calling the meeting, to each
shareholder of record entitled to vote at such meeting.
ARTICLE III
SPECIAL MEETINGS OF SHAREHOLDERS
Section 1. Special meetings of shareholders may be held at
such time and place within or without the State of New York as shall
be stated in the notice of the meeting or in a duly executed waiver of
notice thereof.
Section 2. Special meetings of the shareholders, for any
purpose or purposes, unless otherwise prescribed by statute or by the
certificate of incorporation, may be called by the president, the
board of directors, chairman of the board, or the holders of not less
than twenty-five percent of all the shares entitled to vote at the
meeting.
Section 3. Written or printed notice of a special meeting
stating the place, date and hour of the meeting and the
<PAGE>
purpose or purposes for which the meeting is called, shall be
delivered not less than ten nor more than fifty days before the date
of the meeting, either personally or by mail, by, or at the direction
of, the president, the secretary, or the officer or persons calling
the meeting, to each shareholder of record entitled to vote at such
meeting. The notice should also indicate that it is being issued by,
or at the direction of, the person calling the meeting.
Section 4. The business transacted at any special meeting
of shareholders shall be limited to the purposes stated in the notice.
ARTICLE IV
QUORUM AND VOTING OF STOCK
Section 1. The holders of a majority of the shares of stock
issued and outstanding and entitled to vote, represented in person or
by proxy, shall constitute a quorum at all meetings of the
shareholders for the transaction of business except as otherwise
provided by statute or by the certificate of incorporation. If,
however, such quorum shall not be present or represented at any
meeting of the shareholders, the shareholders present in person or
represented by proxy shall have power to adjourn the meeting from time
to time, without notice other than announcement at the meeting, until
a quorum shall be present or
<PAGE>
represented. At such adjourned meeting at which a quorum shall be
present or represented any business may be transacted which might have
been transacted at the meeting as originally notified.
Section 2. If a quorum is present, the affirmative vote of
a majority of the shares of stock represented at the meeting shall be
the act of the shareholders, unless the vote of a greater or lesser
number of shares of stock is required by law or the certificate of
incorporation.
Section 3. Each outstanding share of stock having a voting
power shall be entitled to one vote on each matter submitted to a vote
at a meeting of shareholders. A shareholder may vote either in person
or by proxy executed in writing by the shareholder or by his duly
authorized attorney-in-fact.
Section 4. The board of directors in advance of any
shareholders' meeting may appoint one or more inspectors to act at the
meeting or any adjournment thereof. If inspectors are not so
appointed, the person presiding at a shareholders' meeting may, and,
on the request of any shareholder entitled to vote thereat, shall
appoint one or more inspectors. In case any person appointed as
inspector fails to appear or act, the vacancy may be filled by the
board in advance of the meeting or at the meeting by the person
presiding thereat. Each inspector, before entering upon the discharge
of his duties, shall take and sign an oath faithfully to execute the
duties of inspector at such
<PAGE>
meeting with strict impartiality and according to the best of his
ability.
Section 5. Whenever shareholders are required or permitted
to take any action by vote, such action may be taken without a meeting
on written consent, setting forth the action so taken, signed by the
holders of all outstanding shares entitled to vote thereon.
ARTICLE V
DIRECTORS
Section 1. The number of directors shall not be less than
three. Directors shall be at least eighteen years of age and need not
be residents of the State of New York nor shareholders of the
corporation. The directors, other than the first board of directors,
shall be elected at the annual meeting of the shareholders, except as
hereinafter provided, and each director elected shall serve until the
next succeeding annual meeting and until his successor shall have been
elected and qualified. The first board of directors shall hold office
until the first annual meeting of shareholders.
Section 2. Any or all of the directors may be removed, with
or without cause, at any time by the vote of the shareholders at a
special meeting called for that purpose.
<PAGE>
Any director may be removed for cause by the action of the
directors at a special meeting called for that purpose.
Section 3. Unless otherwise provided in the certificate of
incorporation, newly created directorships resulting from an increase
in the board of directors and all vacancies occurring in the board of
directors, including vacancies caused by removal without cause, may be
filled by the affirmative vote of a majority of the board of
directors, however, if the number of directors then in office is less
than a quorum then such newly created directorships and vacancies may
be filled by a vote of a majority of the directors then in office. A
director elected to fill a vacancy shall hold office until the next
meeting of shareholders at which election of directors is the regular
order of business, and until his successor shall have been elected and
qualified. A director elected to fill a newly created directorship
shall serve until the next succeeding annual meeting of shareholders
and until his successor shall have been elected and qualified.
Section 4. The business affairs of the corporation shall be
managed by its board of directors which may exercise all such powers
of the corporation and do all such lawful acts and things as are not
by statute or by the certificate of incorporation or by these by-laws
directed or required to be exercised or done by the shareholders.
<PAGE>
Section 5. The directors may keep the books of the
corporation, except such as are required by law to be kept within the
state, outside the State of New York, at such place or places as they
may from time to time determine.
Section 6. The board of directors, by the affirmative vote
of a majority of the directors then in office, and irrespective of any
personal interest of any of its members, shall have authority to
establish reasonable compensation of all directors for services to the
corporation as directors, officers or otherwise.
ARTICLE VI
MEETINGS OF THE BOARD OF DIRECTORS
Section 1. Meetings of the board of directors, regular or
special, may be held either within or without the State of New York.
Section 2. The first meeting of each newly elected board of
directors shall be held at such time and place as shall be fixed by
the vote of the shareholders at the annual meeting and no notice of
such meeting shall be necessary to the newly elected directors in
order legally to constitute the meeting, provided a quorum shall be
present, or it may convene at such place and time as shall be fixed by
the consent in writing of all the directors.
<PAGE>
Section 3. Regular meetings of the board of directors may
be held upon such notice, or without notice, and at such time and at
such place as shall from time to time be determined by the board.
Section 4. Special meetings of the board of directors may
be called by the president on one day's notice to each director,
either personally or by mail or by telegram; special meetings shall be
called by the president or secretary in like manner and on like notice
on the written request of two directors.
Section 5. Notice of a meeting need not be given to any
director who submits a signed waiver of notice whether before or after
the meeting, or who attends the meeting without protesting, prior
thereto or at its commencement, the lack of notice. Neither the
business to be transacted at, nor the purpose of, any regular or
special meeting of the board of directors need be specified in the
notice or waiver of notice of such meeting.
Section 6. A majority of the directors shall constitute a
quorum for the transaction of business unless a greater or lesser
number is required by law or by the certificate of incorporation. The
vote of a majority of the directors present at any meeting at which a
quorum is present shall be the act of the board of directors, unless
the vote of a greater
<PAGE>
number is required by law or by the certificate of incorporation. If
a quorum shall not be present at any meeting of directors, the
directors present may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be
present.
Section 7. Unless otherwise restricted by the certificate
of incorporation or these by-laws, members of the board of directors,
or any committee designated by the board Of directors, may participate
in a meeting of the board of directors, or any committee, by means of
conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other,
and such participation in a meeting shall constitute presence in
person at the meeting.
Section 8. Unless the certificate of incorporation provides
otherwise, any action required or permitted to be taken at a meeting
of the directors or a committee thereof may be taken without a meeting
if a consent in writing to the adoption of a resolution authorizing
the action so taken, shall be signed by all of the directors entitled
to vote with respect to the subject matter thereof.
<PAGE>
ARTICLE VII
EXECUTIVE COMMITTEE
Section 1. The board of directors, by resolution adopted by
a majority of the entire board, may designate, from among its members,
an executive committee and other committees, each consisting of three
or more directors, and each of which, to the extent provided in the
resolution, shall have all the authority of the board, except as
otherwise required by law. Vacancies in the membership of the
committee shall be filled by the board of directors at a regular or
special meeting of the board of directors. The executive committee
shall keep regular minutes of its proceedings and report the same to
the board when required.
ARTICLE VIII
NOTICES
Section 1. Whenever, under the provisions of the statutes
or of the certificate of incorporation or of these by-laws, notice is
required to be given to any director or shareholder, it shall not be
construed to mean personal notice, but such notice may be given in
writing, by mail, addressed to such director or shareholder, at his
address as it appears on the records of the corporation, with postage
thereon prepaid, and such notice shall be deemed to be given at the
time when the same
<PAGE>
shall be deposited in the United States mail. Notice to directors may
also be given by telegram.
Section 2. Whenever any notice of a meeting is required to
be given under the provisions of the statutes or under the provisions
of the certificate of incorporation or these by-laws, a waiver thereof
in writing signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice.
ARTICLE IX
OFFICERS
Section 1. The officers of the corporation shall be chosen
by the board of directors and shall be a chairman of the board, a
president, a vice-president, a secretary and a treasurer. The board of
directors may also choose additional vice-presidents, and one or more
assistant secretaries and assistant treasurers.
Section 2. The board of directors at its first meeting
after each annual meeting of shareholders shall choose a president
from among the directors, and shall choose one or more vice-
presidents, a secretary and a treasurer, none of whom need be a member
of the board.
<PAGE>
Any two or more offices may be held by the same person,
except the offices of president and secretary. When all the issued
and outstanding stock of the corporation is owned by one person, such
person may hold all or any combination of offices.
Section 3. The board of directors may appoint such other
officers and agents as it shall deem necessary who shall hold their
offices for such terms and shall exercise such powers and perform such
duties as shall be determined from time to time by the board of
directors.
Section 4. The salaries of all officers and agents of the
corporation shall be fixed by the board of directors.
Section 5. The officers of the corporation shall hold
office until their successors are chosen and qualify. Any officer
elected or appointed by the board of directors may be removed at any
time by the affirmative vote of a majority of the board of directors.
Any vacancy occurring in any office of the corporation shall be filled
by the board of directors.
THE CHAIRMAN OF THE BOARD
Section 6. The chairman of the board shall preside at all
meetings of the shareholders and the board of directors and shall see
that all orders and resolutions of the board of directors are carried
into effect. He shall in the absence or disability of the president,
perform the duties and exercise the
<PAGE>
powers of the president and shall perform such other duties and have
such powers as the board of directors may from time to time prescribe.
THE PRESIDENT
Section 7. The president shall be chief executive officer,
shall have general and active management of the business of the
corporation, shall, in the absence or disability of the chairman of
the board, perform the duties and exercise the powers of the chairman
of the board and shall perform other such duties and have powers as
the board of directors may from time to time prescribe.
Section 8. He shall execute bonds, mortgages and other
contracts requiring a seal under the seal of the corporation, except
where required or permitted by law to be otherwise signed and executed
and except where the signing and execution thereof shall be expressly
delegated by the board of directors to some other officer or agent of
the corporation.
THE VICE-PRESIDENTS
Section 9. The vice-president or, if there shall be more
than one, the vice-presidents in the order determined by the board of
directors, shall, in the absence or disability of the president,
perform the duties and exercise the powers of the
<PAGE>
president and shall perform such other duties and have such other
powers as the board of directors may from time to time prescribe.
THE SECRETARY AND ASSISTANT SECRETARIES
Section 10. The secretary shall attend all meetings of the
board of directors and all meetings of the shareholders and record all
the proceedings of the meetings of the corporation and of the board of
directors in a book to be kept for that purpose and shall perform like
duties for the standing committees when required. He shall give, or
cause to be given, notice of all meetings of the shareholders and
special meetings of the board Of directors, and shall perform such
other duties as may be prescribed by the board of directors, chairman
of the board or president, under whose supervision he shall be. He
shall have custody of the corporate seal of the corporation and he, or
an assistant secretary, shall have authority to affix the same to any
instrument requiring it and, when so affixed, it may be attested by
his signature or by the signature of such assistant secretary. The
board of directors may give general authority to any other officer to
affix the seal of the corporation and to attest the affixing by his
signature.
Section 11. The assistant secretary or, if there be more
than one, the assistant secretaries in the order determined by the
board of directors, shall, in the absence or disability of
<PAGE>
the secretary, perform the duties and exercise the powers of the
secretary and shall perform such other duties and have such other
powers as the board of directors may from time to time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 12. The treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the
corporation and shall deposit all moneys and other valuable effects in
the name and to the credit of the corporation in such depositories as
may be designated by the board of directors.
Section 13. He shall disburse the funds of the corporation
as may be ordered by the board of directors, taking proper vouchers
for such disbursements, and shall render to the president and the
board of directors at its regular meetings, or when the board of
directors so requires, an account of all his transactions as treasurer
and of the financial condition of the corporation.
Section 14. If required by the board of directors, he shall
give the corporation a bond in such sum and with such surety or
sureties as shall be satisfactory to the board of directors for the
faithful performance of the duties of his office and for the
restoration to the corporation, in case of his
<PAGE>
death, resignation, retirement or removal from office, of all books,
papers, vouchers, money and other property of whatever kind in his
possession or under his control belonging to the corporation.
Section 15. The assistant treasurer, or, if there shall be
more than one, the assistant treasurers in the order determined by the
board of directors, shall, in the absence or disability of the
treasurer, perform the duties and exercise the powers of the treasurer
and shall perform such other duties and have such other powers as the
board of directors may from time to time prescribe.
ARTICLE X
CERTIFICATES FOR SHARES
Section 1. The shares of the corporation shall be
represented by certificates signed by the chairman or vice-chairman of
the board or the president or a vice-president and the secretary or an
assistant secretary or the treasurer or an assistant treasurer of the
corporation and may be sealed with the seal of the corporation or a
facsimile thereof.
When the corporation is authorized to issue shares of more
than one class there shall be set forth upon the face or back of the
certificate, or the certificate shall have a statement that the
corporation will furnish to any shareholder
<PAGE>
upon request and without charge, a full statement of the designation,
relative rights, preferences, and limitations of the shares of each
class authorized to be issued and, if the corporation is authorized to
issue any class of preferred shares in series, the designation,
relative rights, preferences and limitations of each such series so
far as the same have been fixed and the authority of the board of
directors to designate and fix the relative rights, preferences and
limitations of other series.
Section 2. The signatures of the officers of the
corporation upon a certificate may be facsimiles if the certificate is
countersigned by a transfer agent or registered by a registrar other
than the corporation itself or an employee of the corporation. In
case any officer who has signed or whose facsimile signature has been
placed upon a certificate shall have ceased to be such officer before
such certificate is issued, it may be issued by the corporation with
the same effect as if he were such officer at the date of issue.
LOST CERTIFICATES
Section 3. The board of directors may direct a new
certificate to be issued in place of any certificate theretofore
issued by the corporation alleged to have been lost or destroyed.
When authorizing such issue of a new certificate, the board of
<PAGE>
directors, in its discretion and as a condition precedent to the
issuance thereof, may prescribe such terms and conditions as it deems
expedient, and may require such indemnities as it deems adequate, to
protect the corporation from any claim that may be made against it
with respect to any such certificate alleged to have been lost or
destroyed.
TRANSFERS OF SHARES
Section 4. Upon surrender to the corporation or the
transfer agent of the corporation of a certificate representing shares
duly endorsed or accompanied by proper evidence of succession,
assignment or authority to transfer, a new certificate shall be issued
to the person entitled thereto, and the old certificate cancelled and
the transaction recorded upon the books of the corporation.
FIXING RECORD DATE
Section 5. For the purpose of determining shareholders
entitled to notice of or to vote at any meeting of shareholders or any
adjournment thereof, or to express consent to or dissent from any
proposal without a meeting, or for the purpose of determining
shareholders entitled to receive payment of any dividend or the
allotment of any rights, or for the purpose of any other action, the
board of directors may fix, in advance, a
<PAGE>
date as the record date for any such determination of shareholders.
Such date shall not be more than fifty nor less than ten days before
the date of any meeting nor more than fifty days prior to any other
action. When a determination of shareholders of record entitled to
notice of or to vote at any meeting of shareholders has been made as
provided in this section, such determination shall apply to any
adjournment thereof, unless the board fixes a new record date for the
adjourned meeting.
REGISTERED SHAREHOLDERS
Section 6. The corporation shall be entitled to recognize
the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such Owner, and to hold
liable for calls and assessments a person registered on its books as
the owner of shares, and shall not be bound to recognize any equitable
or other claim to or interest in such share or shares on the part of
any other person, whether or not it shall have express or other notice
thereof, except as otherwise provided by the laws of New York.
LIST OF SHAREHOLDERS
Section 7. A list of shareholders as of the record date,
certified by the corporate officer responsible for its
<PAGE>
preparation or by a transfer agent, shall be produced at any meeting
upon the request thereat or prior thereto of any shareholder. If the
right to vote at any meeting is challenged, the inspectors of
election, or person presiding thereat, shall require such list of
shareholders to be produced as evidence of the right of the persons
challenged to vote at such meeting and all persons who appear from
such list to be shareholders entitled to vote thereat may vote at such
meeting.
ARTICLE XI
GENERAL PROVISIONS
DIVIDENDS
Section 1. Subject to the provisions of the certificate of
incorporation relating thereto, if any, dividends may be declared by
the board of directors at any regular or special meeting, pursuant to
law. Dividends may be paid in cash, in shares of the capital stock or
in the corporation's bonds or its property, including the shares or
bonds of other corporations subject to any provisions of law and of
the certificate of incorporation.
Section 2. Before payment of any dividend, there may be set
aside out of any funds of the corporation available for dividends such
sum or sums as the directors from time to time, in their absolute
discretion, think proper as a reserve fund to meet
<PAGE>
contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the corporation, or for such other purpose
as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve
in the manner in which it was created.
CHECKS
Section 3. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other
person or persons as the board of directors may from time to time
designate.
FISCAL YEAR
Section 4. The fiscal year of the corporation shall be
fixed by resolution of the board of directors.
SEAL
Section 5. The corporate seal shall have inscribed thereon
the name of the corporation, the year of its organization and the
words "Corporate Seal, New York". The seal may be used by causing it
or a facsimile thereof to be impressed or affixed or in any manner
reproduced.
<PAGE>
ARTICLE XII
AMENDMENTS
Section 1. These by-laws may be amended or repealed or new
by-laws may be adopted at any regular or special meeting of
shareholders at which a quorum is present or represented, by the vote
of the holders of shares entitled to vote in the election of any
directors, provided notice of the proposed alteration, amendment or
repeal be contained in the notice of such meeting. These by-laws may
also be amended or repealed or new by-laws may be adopted by the
affirmative vote of a majority of the board of directors at any
regular or special meeting of the board. If any by-law regulating an
impending election of directors is adopted, amended or repealed by the
board, there shall be set forth in the notice of the next meeting of
shareholders for the election of directors the by-law so adopted,
amended or repealed, together with precise statement of the changes
made. By-laws adopted by the board of directors may be amended or
repealed by the shareholders.
NYFS06...:\47\41847\0008\1710\TABD116K.160
Exhibit 3.2(b)(i)
<PAGE>
BYLAWS
OF
ALBUQUERQUE INVESTMENTS, INC.
ARTICLES I
OFFICES
SECTION 1.01 BUSINESS OFFICES. The principal office of the
Corporation shall be located in Albuquerque, New Mexico. The
Corporation may have such other offices, either within or outside New
Mexico, as the Board of Directors may designate or as the business of
the Corporation may require from time to time.
SECTION 1.02 REGISTERED OFFICE. The registered office of
the Corporation required by the New Mexico Business Corporation Act to
be maintained in New Mexico may be, but need not be, identical with
the principal office if in New Mexico, and the address of the
registered office may be changed from time to time as provided by law.
ARTICLE II
SHAREHOLDERS
SECTION 2.01 ANNUAL MEETING. An annual meeting of the
shareholders shall be held at 10:00 o'clock a.m. on the first Monday
in the month of November in each year, or on such other date as may be
determined by the Board of Directors, beginning with the year 1990,
for the purpose of electing Directors and for the transaction of such
other business as may come before the meeting. If the day fixed for
the annual meeting is a legal holiday, the meeting shall be held on
the next succeeding business day. If the election of Directors shall
not be held on the day designated herein for any annual meeting of the
shareholders, or at any adjournment thereof, the Board of Directors
shall cause the election to be held at a meeting of the shareholders
as soon thereafter as conveniently may be. Failure to hold an annual
meeting as required by these By-laws shall not invalidate any action
taken by the Board of Directors or officers of the Corporation, nor
shall it work a forfeiture or dissolution of the Corporation.
SECTION 2.02 SPECIAL MEETINGS. Special meetings of the
shareholders, for any purpose or purposes, unless otherwise prescribed
by statute, may be called at any time by the Board of Directors or by
the President, and shall be called by the President or by the
Secretary at the request in writing of a majority of the Board of
Directors or at the request in writing of shareholders owning not less
than one-tenth of all the out
<PAGE>
standing capital stock of the Corporation issued and outstanding and
entitled to vote. Such shareholders' request shall state the purpose
or purposes of the proposed meeting.
SECTION 2.03 PLACE OF MEETINGS. Each meeting of the
shareholders shall be held at such place, either within or without the
State of New Mexico, as may be designated in the notice of meeting,
or, if no place is designated in the notice, at the principal office
of the Corporation.
SECTION 2.04 NOTICE OF MEETINGS. Written notice of each
meeting of the shareholders stating the place, day and hour of the
meeting, and, in the case of a special meeting, the purpose or
purposes for which the meeting is called, shall be delivered, either
personally or by first class mail, postage prepaid, by or at the
direction of the President, or the Secretary, or the officer or person
calling the meeting, to each shareholder of record entitled to notice
of such meeting, not less than ten (10) nor more than fifty (50) days
before the date of the meeting, except that if the authorized shares
of the Corporation are to be increased, at least thirty (30) days'
notice shall be given, and if the sale, lease, exchange or other
disposition of all or substantially all of the property and assets of
the Corporation not in the regular course of business is to be voted
on, at least twenty (20) days' notice shall be given. If mailed, such
notice shall be deemed to be delivered when deposited in the United
States mail, addressed to each shareholder at his address as it
appears on the stock transfer books of the Corporation, with postage
thereon prepaid, but if three (3) successive notices mailed to the
last-known address of any shareholder of record are returned as
undeliverable no further notices to such shareholder shall be
necessary until another address for such shareholder is made known to
the Corporation. If requested by a person or persons, other than the
Corporation, lawfully calling a meeting, the Secretary shall give
notice of such meeting at corporate expense. If a meeting is
adjourned to another time or place, notice need not be given if the
time and place thereof are announced at the meeting, unless the
adjournment is for more than thirty (30) days or if after the
adjournment a new record date is fixed, in either of which cases
notice of the adjourned meeting shall be given to each shareholder of
record entitled to vote at the meeting in accordance with the
foregoing provisions of this Section 2.04.
SECTION 2.05 WAIVER OF NOTICE. Whenever notice is required
by law, the Articles of Incorporation or these By-laws to be given to
any shareholder, a waiver thereof in writing signed by the shareholder
entitled to such notice, whether before, at or after the time stated
therein, shall be equivalent to the giving of such notice. By
attending a meeting, a shareholder (a) waives objection to lack of
notice or defective
<PAGE>
notice of such meeting unless the shareholder, at the beginning of the
meeting, objects to the holding of the meeting or the transacting of
business at the meeting, and (b) waives objection to consideration at
such meeting of a particular matter not within the purpose or purposes
described in the notice of such meeting unless the shareholder objects
to considering the matter when it is presented.
SECTION 2.06 CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD
DATE. For the purpose of determining shareholders entitled to notice
of or to vote at any meeting of the shareholders or any adjournment
thereof, or shareholders entitled to receive payment of any dividend,
or in order to make a determination of shareholders for any other
proper purpose, the Board of Directors may provide that the stock
transfer books shall be closed for any stated period not exceeding
fifty (50) days. If the stock transfer books shall be closed for the
purpose of determining shareholders entitled to notice of or to vote
at a meeting of the shareholders, such books shall be closed for at
least ten (10) days immediately preceding such meeting. In lieu of
closing the stock transfer books the Board of Directors may fix in
advance a date as the record date for any such determination of
shareholders, such date in any case to be not more than fifty (50)
days, and, in case of a meeting of the shareholders, not less than ten
(10) days prior to the date on which the particular action, requiring
such determination of shareholders, is to be taken. If the stock
transfer books are not closed and no record date is fixed for the
determination of shareholders entitled to notice of or to vote at a
meeting of the shareholders, or shareholders entitled to receive
payment of a dividend, the date on which notice of the meeting is
mailed or the date on which the resolution of the Board of Directors
declaring such dividend is adopted, as the case may be, shall be the
record date for such determination of shareholders. When a
determination of shareholders entitled to vote at any meeting of the
shareholders has been made as provided in this section, such
determination shall apply to any adjournment thereof except where the
determination has been made through the closing of the stock transfer
books and the stated period of the closing has expired.
SECTION 2.07 VOTING RECORD. The officer or agent having
charge of the stock transfer books for shares of the Corporation shall
make, at least ten (10) days before each meeting of the shareholders,
a complete record of the shareholders entitled to vote at such meeting
or any adjournment thereof, arranged in alphabetical order, with the
address of and the number of shares held by each. For a period of ten
(10) days before such meeting, this record shall be kept on file at
the principal office of the Corporation and shall be subject to
inspection by any shareholder for any purpose germane to the
<PAGE>
meeting at any time during usual business hours. Such record shall
also be produced and kept open at the time and place of the meeting
and shall be subject to the inspection of any shareholder for any
purpose germane to the meeting during the whole time of the meeting.
The original stock transfer books shall be prima facie evidence as to
who are the shareholders entitled to examine such record or transfer
books or to vote at any meeting of the shareholders. Failure to
comply with the requirements of this section shall not affect the
validity of any action taken at the meeting.
SECTION 2.08 PROXIES. At any meeting of the shareholders,
a shareholder may vote by proxy executed in writing by the shareholder
or his duly authorized attorney-in-fact. Such proxy shall be filed
with the Secretary of the Corporation before or at the time of the
meeting. No proxy shall be valid after eleven (11) months from the
date of its execution, unless otherwise provided in the proxy. Every
proxy shall be revocable at the please of the shareholder executing
it, unless otherwise specifically provided in the proxy.
SECTION 2.09 QUORUM AND MANNER OF ACTING. At all meetings
of shareholders, a majority of the outstanding shares of the
Corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum. If a quorum is present, the affirmative vote of
a majority of the shares represented at the meeting and entitled to
vote on the subject matter shall be the act of the shareholders,
unless the vote of a greater proportion or number or voting by classes
is otherwise required by law, the Articles of Incorporation or these
By-laws. A quorum, once attained at a meeting, shall be deemed to
continue until adjournment notwithstanding the voluntary withdrawal of
enough shares to leave less than a quorum. If any action taken (other
than adjournment) is approved by a majority vote of the shares present
at the time of the vote, such action shall be approved and valid,
unless the vote of a greater proportion or number or voting by classes
is otherwise required by law, the Articles of Incorporation or these
By-laws. In the absence of a quorum at any meeting of the
shareholders, a majority of the shares so represented may adjourn the
meeting from time to time for a period not to exceed sixty (60) days
at any one adjournment. At any such adjourned meeting, at which a
quorum shall be present or represented, any business may be transacted
which might have been transacted at the original meeting.
SECTION 2.10 EXTRAORDINARY MATTERS. Notwithstanding the
provisions of Section 2.09, the following actions shall require the
affirmative vote or concurrence of two-thirds of all of the
outstanding shares of the Corporation (or of each class if class
voting is required by the law or the Articles of Incorporation)
entitled to vote thereon: (i) adopting an amendment or
<PAGE>
amendments to the Articles of Incorporation, (ii) lending money to,
guaranteeing the obligations of or otherwise assisting any of the
Directors of the Corporation or of any other Corporation the majority
of whose voting capital stock is owned by the Corporation, (iii)
authorizing the sale, lease, exchange or other disposition of all or
substantially all of the property and assets of the Corporation, with
or without its goodwill, not in the usual and regular course of
business, (iv) approving a plan of merger, consolidation or exchange
that is required to be approved by the shareholders, (v) adopting a
resolution submitted by the Board of Directors to dissolve the
Corporation, and (vi) adopting a resolution submitted by the Board of
Directors to revoke voluntary dissolution proceedings.
SECTION 2.11 VOTING OF SHARES. Each outstanding share of
record entitled to vote, regardless of class, is entitled to one vote,
and each outstanding fractional share of record is entitled to a
corresponding fractional vote, on each matter submitted to a vote of
the shareholders either at a meeting thereof or pursuant to Section
2.13, except to the extent that the voting rights of the shares of any
class or classes are limited or denied by the Articles of
Incorporation as permitted by law or by resolution of the Board of
Directors pursuant to authority granted by the Articles of
Incorporation. In the election of Directors each record holder of
stock entitled to vote at such election shall have the right to vote
the number of shares owned by him for as many persons as there are
Directors to be elected, and for whose election he has the right to
vote. Cumulative voting shall not be allowed.
SECTION 2.12 VOTING OF SHARES BY CERTAIN HOLDERS.
(a) SHARES HELD OR CONTROLLED BY THE CORPORATION.
Neither treasury shares nor shares held by another corporation if a
majority of the shares entitled to vote for the election of Directors
of such other corporation is held by this Corporation, shall be voted
at any meeting or counted in determining the total number of
outstanding shares at any given time.
(b) SHARES HELD BY ANOTHER CORPORATION. Shares
standing in the name of another corporation may be voted by such
officer, agent or proxy as the By-laws of such corporation may
prescribe or, in the absence of such provision, as the board of
directors of such corporation may determine.
(c) SHARES HELD BY MORE THAN ONE PERSON. Shares
standing of record in the names of two or more persons, whether
fiduciaries, members of a partnership, joint tenants, tenants in
common, tenants by the entirety or otherwise, or if two or more
persons have the same fiduciary relationship respecting the same
shares, voting with respect to the shares shall have the following
effects: (i) if only one person votes, his act binds all; (ii) if two
or more persons vote, the act of the majority so
<PAGE>
voting binds all; (iii) if two or more persons vote, but the vote is
evenly split on any particular matter, each faction may vote the
shares in question proportionally, or any person voting the shares of
a beneficiary, if any, may apply to any court of competent
jurisdiction in the State of New Mexico to appoint an additional
person to act with the persons so voting the shares, in which case the
shares shall be voted as determined by a majority of such persons; and
(iv) if a tenancy is held in unequal interests, a majority or even
split for the purposes of subparagraph (iii) shall be a majority or
even split in interest. The foregoing effects of voting shall not be
applicable if the Secretary of the Corporation is given written notice
of alternative voting provisions and is furnished with a copy of the
instrument or order wherein the alternative voting provisions are
stated.
(d) SHARES HELD IN TRUST OR BY A PERSONAL
REPRESENTATIVE. Shares held by an administrator, executor, guardian,
conservator or other personal representative may be voted by him,
either in person or by proxy, without a transfer of such shares into
his name. Shares standing in the name of a trustee may be voted by
him, either in person or by proxy, but no trustee shall be entitled to
vote shares held by him without a transfer of such shares into his
name.
(e) SHARES HELD BY A RECEIVER OR BANKRUPTCY TRUSTEE.
Shares standing in the name of a receiver or a bankruptcy trustee may
be voted by such receiver or trustee, and shares held by or under the
control of a receiver or bankruptcy trustee may be voted by such
receiver or trustee without the transfer thereof into his name if
authority so to do is contained in an appropriate order of the court
by which such receiver or trustee was appointed.
(f) PLEDGED SHARES. A shareholder whose shares are
pledged shall be entitled to vote such shares until the shares have
been transferred into the name of the pledgee, and thereafter the
pledgee shall be entitled to vote the shares so transferred.
(g) SHARES HELD BY LIFE TENANT. Shares standing in
the name of a person as a life tenant may be voted by him, either in
person or by proxy.
(h) REDEEMABLE SHARES CALLED FOR REDEMPTION.
Redeemable shares that have been called for redemption shall not be
entitled to vote on any matter and shall not be deemed outstanding
shares on and after the date on which written notice of redemption has
been mailed to shareholders and a sum sufficient to redeem such shares
has been deposited with a bank or trust company with irrevocable
instruction and authority to pay the redemption price to the holders
of the shares upon surrender of certificates therefor.
<PAGE>
SECTION 2.13 ACTION WITHOUT A MEETING. Any action required
or permitted to be taken at a meeting of the shareholders may be taken
without a meeting if a consent in writing, setting forth the action so
taken, shall be signed by all of the shareholders entitled to vote
with respect to the subject matter thereof. Such consent (which may
be signed in counterparts) shall have the same force and effect as a
unanimous vote of the shareholders and may be stated as such in any
document. Unless the consent specifies a different effective date,
action taken without a meeting pursuant to a consent in writing as
provided herein shall be effective when all shareholders entitled to
vote have signed the consent. The record date for determining
shareholders entitled to take action without a meeting is the date the
first shareholder signs the consent. All consents signed pursuant to
this Section 2.13 shall be delivered to the Secretary of the
Corporation for inclusion in the minutes or for filing with the
corporate records.
SECTION 2.14 VOTING. Upon the demand of any shareholder or
shareholders entitled to vote who own ten percent (10%) or more of the
shares entitled to vote, the vote for the election of Directors and
the vote upon any question before the meeting shall be by ballot.
ARTICLE III
BOARD OF DIRECTORS
SECTION 3.01 GENERAL POWERS. The business and affairs of
the Corporation shall be managed by its Board of Directors, except as
otherwise provided by law, the Articles of Incorporation or these By-
laws.
SECTION 3.02 NUMBER, TENURE AND QUALIFICATIONS. The number
of Directors of the Corporation shall not be fewer than the minimum
required by law. The exact number of Directors may be fixed,
increased or decreased by the shareholders or by a Board of Directors'
resolution. Directors shall be elected at each annual meeting of the
shareholders or at any meeting of the shareholders held in lieu of
such annual meeting, which meeting, for the purposes of these By-laws,
shall be deemed the annual meeting. The election shall be decided by
majority vote. Each Director shall hold office until the next annual
meeting of the shareholders and thereafter until his successor shall
have been elected and qualified, or until his earlier death,
resignation or removal. Directors must be at least eighteen years old
but need not be residents of New Mexico or shareholders of the
Corporation.
SECTION 3.03 RESIGNATION. Any Director may resign at any
time by giving written notice to the President or to the
<PAGE>
Board of Directors. A Director's resignation shall take effect at the
time specified in the notice and, unless otherwise specified therein,
the acceptance of such resignation shall not be necessary to make it
effective.
SECTION 3.04 REMOVAL. At a meeting called expressly for
that purpose, the entire Board of Directors or any lesser number may
be removed, with or without cause, by a vote of the holders of a
majority of shares then entitled to vote at an election of Directors;
except that if the holders of shares of any class of stock are
entitled to elect one or more Directors by the provisions of the
Articles of Incorporation, the provisions of this section shall apply,
with respect to the removal of a Director or Directors so elected by
such class, to the vote of the holders of the outstanding shares of
that class and not to the vote of the outstanding shares as a whole.
SECTION 3.05 VACANCIES. Any vacancy occurring in the Board
of Directors, other than vacancies due to an increase in the number of
Directors, may be filled by the affirmative vote of a majority of the
remaining Directors though less than a quorum, or by the affirmative
vote of two Directors if there are only two Directors remaining, or by
a sole remaining Director, or by the shareholders if there are no
Directors remaining. A Director elected to fill a vacancy shall be
elected for the unexpired term of his predecessor in office. Any
directorship to be filled by reason of an increase in the number of
Directors shall be filled by the affirmative vote of a majority of the
Directors then in office or by the shareholders, and a Director so
chosen shall hold office for the term specified in Section 3.02 above.
SECTION 3.06 FIRST MEETING OF NEWLY ELECTED DIRECTORS. The
first meeting of the newly elected Board of Directors, for the purpose
of organization, electing officers and for the transaction of such
other business as may come before the meeting, shall be held
immediately after the annual meeting of shareholders, provided a
majority of the members elected be present and that any action taken
at such meeting shall be by a majority vote of the whole Board. If a
majority of the members elected shall not be present at that time, or
if the Directors shall fail to elect officers because of a failure to
obtain a majority vote of the whole Board, the said first meeting of
the Board shall then be held within thirty (30) days after the annual
meeting of shareholders upon three (3) days' notice by mail or one (1)
day by telephone or telegraph.
SECTION 3.07 REGULAR MEETINGS. Regular meetings of the
Board of Directors may be held at any place or places within or
without the State of New Mexico, on such days and at such hours as the
Board of Directors may, by resolution, appoint.
<PAGE>
SECTION 3.08 NOTICE OF REGULAR MEETINGS OF DIRECTORS. No
notice shall be required to be given of any regular meeting of the
Board of Directors.
SECTION 3.09 SPECIAL MEETINGS. Special meetings of the
Board of Directors may be called by or at the request of the Chairman
of the Board, the President or any two Directors. The person or
persons authorized to call special meetings of the Board of Directors
may fix any place as the place, either within or without the State of
New Mexico, for holding any special meeting of the Board called by
them.
SECTION 3.10 NOTICE OF SPECIAL MEETINGS OF DIRECTORS.
Notice of each special meeting of the Board of Directors, stating the
place, day and hour thereof, shall be given by the Chairman of the
Board, the President, the Secretary, or by any two (2) members of the
Board to each Director not less than three (3) days by mail or one (1)
day by telephone, telegraph, or in person. The method of notice need
not be the same to each Director. Notice shall be deemed to be given,
if mailed, when deposited in the United States mail, with first class
postage thereon prepaid, addressed to the Director at his business or
residence address; if personally delivered, when delivered to the
Director; if telegraphed, when the telegram is delivered to the
telegraph company; if telephoned, when communicated to the Director.
Neither the business to be transacted at nor the purpose of any
meeting of the Board of Directors need be specified in the notice or
waiver of notice of such meeting unless otherwise required by statute.
SECTION 3.11 WAIVER OF NOTICE. Whenever notice is required
by law, the Articles of Incorporation or these By-laws to be given to
the Directors, a waiver thereof in writing signed by the Director
entitled to such notice, whether before, at or after the time stated
therein, shall be equivalent to the giving of such notice. By
attending or participating in a meeting, a Director waives any
required notice of such meeting unless, at the beginning of the
meeting, he objects to the holding of the meeting or the transacting
of business at the meeting.
SECTION 3.12 PRESUMPTION OF ASSENT. A Director of the
Corporation who is present at a meeting of the Board of Directors or a
committee of the Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action taken
unless he objects at the beginning of the meeting to the holding of
the meeting or the transacting of business at the meeting,
contemporaneously requests that his dissent to the action taken be
entered in the minutes of such meeting or gives written notice of his
dissent to the presiding officer of such meeting before its
adjournment or to the Secretary of the Corporation immediately after
adjournment of such meeting. The right of dissent as to a specific
action taken
<PAGE>
at a meeting of the Board or committee thereof is not available to a
Director who votes in favor of such action.
SECTION 3.13 QUORUM AND MANNER OF ACTING. Except as
otherwise may be required by law, the Articles of Incorporation or
these By-laws, a majority of the number of Directors fixed by Section
3.02, present in person, shall constitute a quorum for the transaction
of business at any meeting of the Board of Directors. A quorum, once
attained by a meeting, shall be deemed to continue until adjournment
notwithstanding a voluntary withdrawal of enough Directors to leave
less than a quorum and the vote of a majority of the Directors present
at the time of a vote at a meeting at which a quorum is present or was
obtained shall be the act of the Board of Directors, unless a greater
than majority vote is required by law, the Articles of Incorporation
or these By-laws. If less than such majority is present at the
commencement of a meeting, a majority of the Directors present may
adjourn the meeting from time to time without further notice other
than an announcement at the meeting, until a quorum shall be present.
No Director may vote or act by proxy or power of attorney at any
meeting of Directors.
SECTION 3.14 EXECUTIVE AND OTHER COMMITTEES. The Board of
Directors, by resolution adopted by a majority of the full board, may
designate from among its members an executive committee and one (1) or
more other committees, each of which, to the extent provided in the
resolution establishing such committee, shall have and may exercise
all of the authority of the Board of Directors in the management of
the business and affairs of the Corporation, except that no such
committee shall have the power or authority to (a) declare dividends
or distributions; (b) approve, recommend or submit to the shareholders
actions or proposals required by law to be approved by the
shareholders; (c) fill vacancies on the Board of Directors or any
committee thereof, including any committee authorized by this Section
3.14; (d) amend the By-laws; (e) approve a plan of merger not
requiring shareholder approval; (f) reduce earned or capital surplus;
(g) authorize or approve the reacquisition of shares of the Cor-
poration, unless pursuant to a general formula or method specified by
the Board of Directors; or (h) authorize or approve the issuance or
sale of, or any contract to issue or sell, shares of the Corporation's
stock or designate the terms of a series of a class of shares. The
delegation of authority to any committee shall not operate to relieve
the Board of Directors or any member of the Board from any
responsibility imposed by law. Rules governing procedures for
meetings of any committee of the Board shall be as established by the
committee, or in the absence thereof by the Board of Directors. Each
committee shall keep regular minutes of its meetings, which shall be
reported to the
<PAGE>
Board of Directors when required and submitted to the Secretary of the
Corporation for inclusion in the corporate records.
SECTION 3.15 COMPENSATION. No Director, as such, shall
receive any salary for their services, but by resolution of the Board
of Directors, notwithstanding any personal interest of a Director in
such action, a Director may be paid his expenses, if any, of
attendance at each meeting of the Board of Directors and each meeting
of any committee of the Board of which he is a member and may be paid
a fixed sum for attendance at each such meeting or a stated salary, or
both a fixed sum and a stated salary. No such payment shall preclude
any Director from serving the Corporation in any other capacity and
receiving compensation therefor.
SECTION 3.16 MEETINGS OR PARTICIPATION THEREIN BY MEANS OF
COMMUNICATION EQUIPMENT. Unless otherwise provided by the Articles of
Incorporation, one or more members of the Board of Directors or any
committee thereof may participate in a meeting of the Board or
committee by means of conference telephone or similar communications
equipment by which all persons participating in the meeting can hear
and be heard by each other at the same time. Such participation shall
constitute presence in person at the meeting.
SECTION 3.17 ACTION WITHOUT A MEETING. Any action required
or permitted to be taken at a meeting of the Directors or any
committee thereof may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by all of
the Directors or committee members. Such consent (which may be signed
in counterparts) shall have the same force and effect as a unanimous
vote of the Directors or committee members and may be stated as such
in any document. Unless the consent specifies a different effective
date, action taken without a meeting pursuant to a consent in writing
as provided herein is effective when all Directors or committee
members have signed the consent. All consents signed pursuant to this
Section 3.17 shall be delivered to the Secretary of the Corporation
for inclusion in the minutes or for filing with the corporate records.
SECTION 3.18 CHAIRMAN AND VICE-CHAIRMAN. The Board of
Directors may by resolution elect from the members of the Board of
Directors a Chairman to preside at meetings of the Board of Directors
and of shareholders; to coordinate the activities and responsibilities
of the Board; and to take such other action as is necessary on behalf
of the Board including recommendations of executive committees and
nominations of members to serve on such committees. The Board of
Directors may also elect a Vice-Chairman to serve in the absence of
the Chairman and to assist him in the performance of his duties. The
Chairman and Vice-
<PAGE>
Chairman may receive compensation for their services if authorized by
the Board of Directors.
ARTICLE IV
OFFICERS AND AGENTS
SECTION 4.01 NUMBER AND QUALIFICATIONS. The officers of
the Corporation shall consist of a President, a Vice-President, a
Secretary, a Treasurer and such other officers, assistant officers and
agents, including a Chairman of the Board, an Executive Vice-
President, additional Vice-Presidents, a controller, assistant
secretaries and assistant treasurers, as may from time to time be
elected or appointed by the Board. Any number of offices may be held
by the same person, except that no person may simultaneously hold the
offices of President and Secretary. All officers must be at least
eighteen years old.
SECTION 4.02 ELECTION AND TERM OF OFFICE. The officers of
the Corporation shall be elected by the Board of Directors annually at
the first meeting of the Board held after each annual meeting of the
shareholders. The Chairman of the Board and the President shall be
elected from among the Directors. If the election of officers shall
not be held at such meeting, such election shall be held as soon
thereafter as conveniently may be. Each officer shall hold office
until his successor shall have been duly elected and shall have
qualified, or until his earlier death, resignation or removal.
SECTION 4.03 SALARIES. The salaries of the officers shall
be as fixed from time to time by the Board of Directors and no officer
shall be prevented from receiving a salary by reason of the fact that
he is also a Director of the Corporation. No officer shall be
entitled to compensation for his services as an officer unless and
until fixed by resolution of the Board of Directors.
SECTION 4.04 RESIGNATION. Any officer may resign at any
time, subject to any rights or obligations under any existing
contracts between the officer and the Corporation by giving written
notice to the Chairman of the Board, the President or the Board of
Directors. An officer's resignation shall take effect at the time
specified in such notice, and unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it
effective.
SECTION 4.05 REMOVAL. Any officer or agent may be removed
by the Board of Directors whenever in its judgment the best interests
of the Corporation will be served thereby, but such removal shall be
without prejudice to the contract rights, if any, of the person so
removed. Election or appointment of an officer or agent shall not in
itself create contract rights.
<PAGE>
SECTION 4.06 VACANCIES. A vacancy in any office, however
occurring, may be filled by the Board of Directors for the unexpired
portion of the term at any regular or special meeting.
SECTION 4.07 AUTHORITY AND DUTIES OF OFFICERS. The
officers of the Corporation shall have the authority and shall
exercise the powers and perform the duties specified below and as may
be additionally specified by the Chairman, the President, the Board of
Directors or these By-laws, except that in any event each officer
shall exercise such powers and perform such duties as may be required
by law:
(a) PRESIDENT. The President shall, subject to the
direction and supervision of the Board of Directors: (i) be the Chief
Executive Officer of the Corporation and have general and active
control of its day to day operations and supervision of its officers,
agents and employees; (ii) in the absence of the Chairman or of the
Board (or Vice-Chairman if one is elected) (which absence shall
include refusal or inability to act) or if no Chairman or Vice-
Chairman of the Board has been elected, preside at all meetings of the
shareholders and the Board of Directors and perform the duties of and
have all of the powers of and be subject to all of the restrictions
upon the Chairman of the Board; (iii) see that all orders and
resolutions of the Board of Directors are carried into effect; and
(iv) perform all other duties incident to the office of President and
Chief Executive Officer and as from time to time may be assigned to
him by the Board of Directors.
(b) VICE-PRESIDENTS. The Vice-President, or if there
is more than one then each Vice-President, shall assist the President
and shall perform such duties as may be assigned to him by the
President, the Chairman of the Board, or by the Board of Directors.
The Executive Vice-President, if there is one (or if there is none
then the Vice-President designated by the Board of Directors, or if
there be no such designation then the Vice- Presidents in order of
their election), shall, at the request of the President, or in his
absence or inability or refusal to act, perform the duties of the
President and when so acting shall have all the powers of and be
subject to all the restrictions upon the President.
(c) SECRETARY. The Secretary shall: (i) keep the
minutes of the proceedings of the shareholders, the Board of Directors
and any committees of the Board; (ii) see that all notices are duly
given in accordance with the provisions of these By-laws or as
required by law; (iii) be custodian of the corporate records and of
the seal of the Corporation; (iv) keep at the Corporation's registered
office or principal place of business a record containing the names
and addresses of all shareholders and the number and class of shares
held by each, unless
<PAGE>
such a record shall be kept at the office of the Corporation's
transfer agent or registrar; (v) have general charge of the stock
books of the Corporation, unless the Corporation has a transfer agent;
and (vi) in general, perform all duties incident to the office of
Secretary and such other duties as from time to time may be assigned
to him by the President, the Chairman, or by the Board of Directors.
Assistant secretaries, if any, shall have the same duties and powers,
subject to supervision by the Secretary.
(d) TREASURER. The Treasurer shall: (i) be the
principal financial officer of the Corporation and have the care and
custody of all its funds, securities, evidences of indebtedness and
other personal property and deposit the same in accordance with the
instructions of the Board of Directors; (ii) receive and give receipts
and acquittances for monies paid in on account of the Corporation, and
pay out of the funds on hand all bills, payrolls and other just debts
of the Corporation of whatever nature upon maturity; (iii) unless
there is a controller, be the principal accounting officer of the
Corporation and as such prescribe and maintain the methods and systems
of accounting to be followed, keep complete books and records of
account, prepare and file all local, state and federal tax returns,
prescribe and maintain an adequate system of internal audit and
prepare and furnish to the President, the Chairman of the Board and
the Board of Directors statements of account showing the financial
position of the Corporation and the results of its operations; (iv)
upon request of the Board, make such reports to it as may be required
at any time; and (v) perform all other duties incident to the office
of Treasurer and such other duties as from time to time may be
assigned to him by the Chairman of the Board, the Board of Directors
or the President. Assistant treasurers, if any, shall have the same
powers and duties, subject to supervision by the Treasurer.
SECTION 4.08 OTHER OFFICERS. The Board may appoint such
committees and officers as it shall determine, who shall hold their
offices for such terms and shall exercise such powers and perform such
duties as shall be determined from time to time by the Board of
Directors.
SECTION 4.09 DELEGATION OF DUTIES. In case of the absence
or inability of any officer to act in his place, the Board of
Directors may from time to time delegate the powers or duties of such
officer to any Director or other person whom the Board may select.
SECTION 4.10 SURETY BONDS. The Board of Directors may
require any officer or agent of the Corporation to execute to the
Corporation a bond in such sums and with such sureties as shall be
satisfactory to the Board, conditioned upon the faithful performance
of his duties and for the restoration to the Corpora
<PAGE>
tion of all books, papers, vouchers, money and other property of
whatever kind in his possession or under his control belonging to the
Corporation.
ARTICLE V
STOCK
SECTION 5.01 ISSUANCE OF SHARES. The issuance or sale by
the Corporation of any shares of its authorized capital stock of any
class, including treasury shares, shall be made only upon
authorization by the Board of Directors, except as otherwise may be
provided by law. No shares shall be issued until full consideration
has been received therefor and such shares shall thereafter be fully
paid and nonassessable. Every issuance of shares shall be recorded in
stock books maintained for such purpose by or on behalf of the
Corporation.
SECTION 5.02 CERTIFICATES FOR SHARES. The shares of stock
of the Corporation shall be represented by consecutively numbered
certificates signed in the name of the Corporation by the Chairman or
Vice-Chairman of the Board of Directors or by the President or a Vice-
President and by the Treasurer or an assistant Treasurer or by the
Secretary or an assistant Secretary, and shall be sealed with the seal
of the Corporation or with a facsimile thereof. The signatures of the
Corporation's officers on any certificate may also be facsimiles if
the certificate is countersigned by a transfer agent or registered by
a registrar, both of which may be the Corporation itself or an
employee of the Corporation. In case any officer who has signed or
whose facsimile signature has been placed upon such certificate shall
have ceased to be such officer before such certificate is issued, it
may be issued by the Corporation with the same effect as if he were
such officer at the date of its issue. Certificates of stock shall be
in such form consistent with law as shall be prescribed by the Board
of Directors.
SECTION 5.03 FRACTIONAL SHARES. Whenever any fractional
interests would, but for this Section 5.03, be created with respect to
any shares of the Corporation's stock, the Corporation, at the
discretion of the Directors, lay, but shall not be obligated or
required to, issue fractions of a share. If the Corporation chooses
not to issue fractions it shall either (a) arrange for the disposition
of the fractional interests by those entitled thereto, or (b) pay in
cash the fair value, as determined by the Directors, of the fractional
interests as of the time those entitled to such fractions are
determined, or (c) issue scrip in registered or bearer form upon the
terms and conditions consistent with law as determined by the
Directors and entitling the holder thereof to receive a full share
upon the
<PAGE>
surrender of scrip aggregating a full share. The Corporation shall
not be obligated to make any transfer of shares, even if presentation
for such transfer is otherwise proper as provided in Section 5.06, if
such transfer would create a fractional interest in a share of stock.
SECTION 5.04 CONSIDERATION FOR SHARES. Shares shall be
issued for such consideration expressed in dollars (but not less than
the par value thereof) as shall be fixed from time to time by the
Board of Directors. Such consideration may consist, in whole or in
part, of money, other property, tangible or intangible, or labor or
services actually performed for the Corporation, but neither the
promissory note of a subscriber or direct purchaser of shares from the
Corporation, nor the unsecured or nonnegotiable promissory note of any
other person, nor future services shall constitute payment or part
payment for shares. Treasury shares shall be disposed of for such
consideration expressed in dollars as may be fixed from time to time
by the Board.
SECTION 5.05 LOST OR DESTROYED CERTIFICATES. In case of
the alleged loss, destruction, or mutilation of a certificate of
stock, the Board of Directors may direct the issuance of a new
certificate in lieu thereof upon such terms and conditions in
conformity with law as it may prescribe. The Board of Directors may
in its discretion require a bond in such form and amount and with such
surety as it may determine before issuing a new certificate.
SECTION 5.06 TRANSFER OF SHARES. Except as provided in
Section 5.03 regarding fractional shares and subject to any transfer
restrictions set forth or referred to on the certificate of stock or
of which the Corporation otherwise has notice, shares of the
Corporation shall be transferable on the books of the Corporation by
the holder of record thereof, personally or by his duly authorized
legal representative or other appropriate person as permitted by law,
upon presentation to the Corporation or to the Corporation's transfer
agent of a certificate of stock signed by, or accompanied by a
separate assignment from, the holder of record thereof or his duly
authorized legal representative or other appropriate person as
permitted by law. The Corporation may require that any transfer of
shares be accompanied by proper evidence reasonably satisfactory to
the Corporation that such endorsement is genuine and effective. Upon
presentation of shares for transfer as provided above, payment of all
taxes, if any, therefor and the satisfaction of any other requirements
of law, including inquiry into and discharge of any adverse claims of
which the Corporation has notice, the Corporation shall issue a new
certificate to the person entitled thereto and cancel the old
certificate. Every transfer of stock shall be entered on the stock
books of the Corporation.
<PAGE>
SECTION 5.07 RETURNED CERTIFICATES. All certificates for
shares changed or returned to the Corporation for transfer shall be
marked by the Secretary or the Corporation's transfer agent or
registrar "Cancelled" with the date of the cancellation and the
transaction shall be immediately recorded in the certificate book
opposite the memorandum of their issue. The returned certificate may
be inserted in the certificate book.
SECTION 5.08 HOLDERS OF RECORD. The Corporation shall be
entitled to treat the holder of record of any share of stock as the
holder in fact thereof, and accordingly shall not be bound to
recognize any equitable or other claim to or interest in such share on
the part of any other person whether or not it shall have express or
other notice thereof, except as may be otherwise expressly required by
law.
SECTION 5.09 SHARES HELD FOR THE ACCOUNT OF A SPECIFIED
PERSON OR PERSONS. The Board of Directors, in the manner provided by
law, may adopt a procedure whereby a shareholder of the Corporation
may certify in writing to the Corporation that all or a portion of the
shares registered in the name of such shareholder are held for the
account of a specified person or persons.
SECTION 5.10 TRANSFER AGENTS, REGISTRARS AND PAYING AGENTS.
The Board of Directors may at its discretion appoint one or more
transfer agents, registrars or agents for making payment upon any
class of stock, bond, debenture or other security of the Corporation.
Such agents and registrars may be located either within or without the
State of New Mexico. They shall have such rights and duties and shall
be entitled to such compensation as may be agreed.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01 VOTING OF SECURITIES BY THE CORPORATION.
Unless otherwise provided by resolution of the Board of Directors, on
behalf of the Corporation the President or any Vice-President shall
attend in person or by substitute appointed by him, or shall execute
written instruments appointing a proxy or proxies to represent the
Corporation at, all meetings of the shareholders of any other
Corporation, association or other entity in which the Corporation
holds any stock or other securities, and may execute written waivers
of notice with respect to any such meetings. At all such meetings and
otherwise, the President or any Vice-President, in person or by
substitute or proxy as aforesaid, may vote the stock or other
securities so held by the Corporation and may execute written consents
and any other instruments with respect to such stock or securities and
may exercise any and all rights and powers incident to the
<PAGE>
ownership of said stock or securities, subject, however, to the
instructions, if any, of the Board of Directors.
SECTION 6.02 SEAL. The corporate seal of the Corporation
shall be in such form as adopted by the Board of Directors, and any
officer of the Corporation may, when and as required, affix or impress
the seal, or a facsimile thereof, to or on any instrument or document
of the Corporation.
SECTION 6.03 FISCAL YEAR. The fiscal year of the
Corporation shall be as established by the Board of Directors.
SECTION 6.04 DIVIDENDS. The Board of Directors may declare
dividends payable out of lawfully available funds, whenever in the
exercise of its discretion it may deem such declaration advisable,
subject to the provisions of any applicable law. Such dividends may
be paid in cash, property or shares of the Corporation.
SECTION 6.05 CONTRACTS. The Board of Directors may
authorize any officer or officers, agent or agents, to enter into any
contract or execute and deliver any instrument in the name of and on
behalf of the Corporation, and such authority may be general or
confined to specific instances.
SECTION 6.06 LOANS. No loans shall be contracted on behalf
of the Corporation and no evidences of indebtedness shall be issued in
its name unless authorized by a resolution of the Board of Directors.
Such authority may be general or confined to specific instances.
SECTION 6.07 CHECKS, DRAFTS, ETC. All checks, drafts or
other orders for the payment of money, notes or other evidence of
indebtedness issued in the name of the Corporation, shall be signed by
such officer or officers, agent or agents, of the Corporation and in
such manner as is provided in these By-laws or as may be provided from
time to time by the Board of Directors.
SECTION 6.08 DEPOSITS. All funds of the Corporation, not
otherwise employed, shall be deposited from time to time to the credit
of the Corporation in such banks, trust companies or other
depositories as the Board of Directors may select.
SECTION 6.09 NOTICES. Whenever the provisions of
applicable laws, the Articles of Incorporation or these By-laws
require notice to be given to any Director or officer, such provision
shall not be construed to mean personal notice; unless specifically
required by statute, such notice may be given in writing by depositing
the same in a post office or letter box, in a first class mail prepaid
sealed wrapper, addressed to such Director or officer at his or her
address as the same appears upon the books of the Corporation, and the
time when the same shall be received shall be deemed to be the time of
the giving of such notice. Such notice may also be given by prepaid
telegram or by telephone.
<PAGE>
SECTION 6.10 INSPECTORS OF ELECTIONS. At any shareholders
meeting or any adjournment thereof, inspectors of election may be
appointed to act at such meeting by the Chairman of the Board, or the
proctor if one is appointed.
The inspectors shall determine the number of shares
outstanding, the voting power of each of such shares, the number of
shares represented at the meeting, the existence of a quorum, and the
authenticity, validity, and effect of proxies for such shares they
shall receive for votes, ballots, or consents, and shall hear and
determine all challenges and questions in any way arising in
connection with the right to vote at such meeting; and they shall
count and tabulate all votes or consents, determine the results, and
perform such further services as may be proper to insure fairness to
all shareholders. The decision, act or certificate of a majority of
the inspectors is effective in all respects as the decision, act or
certificate of all.
On request of the Chairman of the Board or any of the share-
holders or their proxy, the inspectors shall make a report in writing
of any challenge on matters determined by them and shall execute a
certificate of any fact found by them. Any report or certificate made
by any such inspector is prima facie evidence of the facts stated
therein.
SECTION 6.11 AMENDMENTS. The Directors may amend or repeal
these By-laws except to the extent that the Articles of Incorporation
reserve such powers exclusively to the shareholders in whole or in
part or the shareholders, in amending or repealing a particular By-law
provision, provide expressly that the Directors may not amend or
repeal such By-law. The shareholders may amend or repeal the By-laws
even though the By-laws may also be amended or repealed by the
Directors.
The undersigned, President and Secretary of the Corporation,
certify that these By-laws were duly adopted by unanimous vote of the
Board of Directors at its meeting held on November 5, 1990.
/s/Brent Therrien
---------------------
BRENT THERRIEN
President
ATTEST:
/s/Janice Therrien
---------------------
JANICE THERRIEN
Secretary
NYFS06...:\47\41847\0008\1710\EXHD126K.210
Exhibit 3.2(c)(i)
<PAGE>
BYLAWS
OF
AMERICAN CHECK EXCHANGE, INC.
ARTICLE I
Offices
-------
Section 1. Principal Offices. The principal office of
-----------------
the corporation in the State of Arizona shall be located in the City
of Phoenix, the County of Maricopa.
Section 2. Other Offices. The corporation may maintain
-------------
other offices, either within or without the State of Arizona, as
determined by the board of directors, whereat all business of the
corporation may be transacted.
Section 3. Known Place of Business. The known place of
-----------------------
business of the corporation, as required by A.R.S. Section 10-012 to be
maintained in the State of Arizona, may be, but need not be, identical
with the office of its statutory agent in the State of Arizona. The
address of the known place of business may be changed from time to
time by the board of directors in accordance with A.R.S. Section 10-013.
ARTICLE II
Shareholders
------------
Section 1. Annual Meetings. The annual meetings of the
---------------
shareholders of the corporation shall be held at Phoenix,
<PAGE>
Arizona on the first Monday in the month of November in each year,
commencing with the year 1983, or at such other time on such other day
within such month as shall be fixed by the board of directors, for the
purpose of electing a board of directors for the ensuing year and for
the transacting of such other business properly coming before said
meeting. If the election of directors shall not be held on the day
designated herein for any annual meeting of the shareholders, or at
any adjournment thereof, the board of directors shall cause the
election to be held at a special meeting of the shareholders as soon
thereafter as conveniently possible.
Section 2. Special Meetings. Special Meetings of the
----------------
stockholders, for any purpose or purposes, unless otherwise prescribed
by statute, may be called by the president or by a majority of the
board of directors, and shall be called by the president at the
request in writing of the holders of not fewer than one-tenth of all
the shares entitled to vote at the meeting. Such request shall state
the purpose or purposes of the proposed meeting.
Section 3. Place of Meetings. The board of directors
-----------------
may designate any place, either within or without the State of
Arizona, as the place of meeting for any annual meeting or for any
special meeting. A waiver of notice signed by all shareholders
entitled to vote at a meeting may designate any
<PAGE>
place, either within or without the State of Arizona, as the place for
the holding of such a meeting. If no designation is made, or if a
special meeting be otherwise called, the place of meeting shall be the
known place of business of the corporation in the State of Arizona.
Section 4. Notice of Meetings. Written notice stating
------------------
the place, day and hour of the meeting and, in the case of a special
meeting, the purpose or purposes for which the meeting is called,
shall, unless otherwise prescribed by statute, be delivered not less
than ten (10) nor more than fifty (50) days before the date of the
meeting, either personally or by mail, by an officer of the
corporation at the direction of the person or persons calling the
meeting. If mailed, such notice shall be deemed to be delivered when
mailed to the shareholder at his address as it appears on the stock
transfer books of the corporation.
When a meeting is adjourned to another time or place,
notice need not be given of the adjourned meeting if the time and
place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the corporation may transact any
business which might have been transacted at the original meeting. If
the adjournment is for more than thirty (30) days or if after the
adjournment a new record date is fixed for the adjourned meeting,
a notice of the adjourned meeting
<PAGE>
shall be given to each shareholder entitled to vote at the meeting.
Section 5. Fixing Date for Determination of Shareholders
---------------------------------------------
of Record. In order that the corporation may determine the
---------
shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment thereof, or entitled to express
consent to corporate action in writing without a meeting, or entitled
to receive payment of any dividend or other distribution or allotment
of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of shares or for the purpose of any
other lawful action, the board of directors of the corporation may
fix, in advance, a record date, which shall not be more than sixty
(60) nor less than ten (10) days before the date of such meeting, nor
more than sixty (60) days nor less than ten (10) days prior to any
other action.
A determination of the shareholders of record entitled
to notice of or to vote at a meeting of shareholders shall apply to
any adjournment or adjournments of the meeting held within thirty (30)
days of the meeting; provided, however, that in its discretion the
board of directors may fix a new record date for any adjourned
meeting.
Section 6. Voting Record. The officer or agent having
-------------
charge of the stock transfer books for shares of the
<PAGE>
corporation shall make a complete record of the shareholders entitled
to vote at each meeting of shareholders or any adjournment thereof,
arranged in alphabetical order, with the address of and the number of
shares held by each. Such record shall be produced and kept open at
the time and place of the meeting and shall be subject to the
inspection of any shareholder during the whole time of the meeting for
the purposes thereof.
Section 7. Quorum. A majority of the outstanding shares
------
of the corporation entitled to vote, represented in person or by
proxy, shall constitute a quorum at a meeting of shareholders. All
shares represented and entitled to vote on any single subject matter
which may be brought before the meeting shall be counted for the
purposes of a quorum. Only those shares entitled to vote on a
particular subject matter shall be counted for the purposes of voting
on that subject matter. Business may be conducted once a quorum is
present and may continue until adjournment of the meeting
notwithstanding the withdrawal or temporary absence of sufficient
shares to reduce the number present to less than a quorum. Unless
required by law, the affirmative vote of the majority of shares
represented at the meeting and entitled to vote on a subject matter
shall be the act of the shareholders; provided, however, that if the
shares then represented are less than required to constitute a quorum,
the affirmative vote must be such as would constitute a majority if a
<PAGE>
quorum were present and, provided further, that the affirmative vote
of the majority of the shares then present is sufficient in all cases
to adjourn the meeting.
Section 8. Proxies. At all meetings of shareholders, a
-------
shareholder may vote in person or by proxy executed in writing by the
shareholder or by his duly authorized attorney-in-fact. No proxy
shall be valid after eleven (11) months from the date of its
execution, unless otherwise provided in the proxy. A duly executed
proxy shall be irrevocable if it states that it is irrevocable and if,
and only as long as, it is coupled with an interest sufficient in law
to support an irrevocable power. A proxy may be made irrevocable
regardless of whether the interest with which it is coupled is an
interest in the share itself or an interest in the corporation
generally. A proxy is not revoked by the death or incapacity of the
maker unless, before the vote is counted or a quorum is determined,
written notice of the death or incapacity is given to the corporation.
Section 9. Voting of Shares by Certain Holders. Shares
-----------------------------------
of its own stock belonging to the corporation or to another
corporation, if a majority of the shares entitled to vote in the
elections of directors of such other corporation is held by the
corporation, shall neither be entitled to vote nor counted for quorum
purposes, provided; however, that nothing herein shall
<PAGE>
be construed as limiting the right of the corporation to vote its own
stock held by it in a fiduciary capacity.
Shares standing in the name of another corporation may
be voted by such officer, agent or proxy as the bylaws of such other
corporation may prescribe, or, in the absence of such provision, as
the board directors of such other corporation may determine.
Shares held by an administrator, executor, guardian or
conservator may be voted by him, either in person or by proxy, without
a transfer of such shares into his name. Shares standing in the name
of a trustee, other than a trustee in bankruptcy, may be voted by him
either in person or by proxy, but no such trustee shall be entitled to
vote shares held by him without a transfer of such shares into his
name.
Shares standing in the name of a receiver, trustee in
bankruptcy, or assignee for the benefit of creditors may be voted by
such representative, either in person or by proxy. Shares held by or
under the control of such a receiver or trustee may be voted by such
receiver or trustee, either in person or by proxy, without the
transfer thereof into his name if authority so to do be contained in
an appropriate order of the court by which such receiver or trustee
was appointed.
A shareholder whose shares are pledged shall be
entitled to vote such shares until the shares have been
<PAGE>
transferred into the name of the pledgee, and thereafter the pledgee
shall be entitled to vote the shares so transferred.
If shares stand in the names of two or more persons,
whether fiduciaries, members of a partnership, joint tenants, tenants
in common, tenants by the entirety or tenants by community property or
otherwise, or if two or more persons have the same fiduciary
relationship with respect to the same shares, unless the corporation
is given written notice to the contrary and is furnished with a copy
of the instrument or order appointing them or creating the
relationship wherein it is so provided, their acts with respect to
voting shall have the effect of (a) if only one votes, his act binds;
(b) if more than one votes, the act of the majority so voting binds
all, and (c) if more than one votes, but the vote is evenly split on
any one particular matter, each fraction may vote the shares in
question proportionally.
Shares standing in the name of a married woman but not
also standing in the name of her husband with such a designation of
the mutual relationship on the certificate, may be voted and all
rights incident thereto may be exercised in the same manner as if she
were unmarried.
Section 10. Voting Rights. Each outstanding share or
-------------
fraction thereof shall be entitled to one vote or corresponding
fraction thereof on each matter submitted to a vote
<PAGE>
at a meeting of shareholders, except as may be otherwise provided by
law.
At each election for directors every shareholder
entitled to vote at such election shall have the right to vote, in
person or by proxy, the number of shares owned by him for as many
persons as there are directors to be elected and for whose election he
has a right to vote, or to cumulate his votes by giving one candidate
as many votes as the number of such directors multiplied by the number
of his shares shall equal, or by distributing such votes on the same
principle among any number of such candidates.
Section 11. Action by Shareholders Without a Meeting.
----------------------------------------
Any action required or permitted to be taken at a meeting of the
shareholders may be taken without a meeting if a consent in writing,
setting forth the action so taken, is signed by all of the
shareholders entitled to vote with respect to the subject matter
thereof. Such consent shall have the same effect as the unanimous
vote of the shareholders.
ARTICLE III
Directors
---------
Section 1. Powers of Directors. The business and
-------------------
affairs of the corporation shall be managed by its board of directors.
<PAGE>
Section 2. Number, Tenure and Qualifications. The
---------------------------------
number of directors of the corporation shall be from one (1) to seven
(7). Each director shall hold office until the next succeeding annual
meeting and until his successor shall have been duly elected and
qualified, or until his earlier resignation or removal. Any director
may resign at any time upon written notice to the corporation. The
directors need not be residents of the State of Arizona or
shareholders of the corporation.
Section 3. Vacancies. Any vacancy occurring in the
---------
board of directors may be filled by the affirmative vote of the
majority of the remaining directors though not less than a quorum, or
by a sole remaining director, and any so chosen shall hold office
until the next election of directors when his successor is elected and
qualified. Any newly created directorship shall be deemed a vacancy.
When one or more directors shall resign from the board, effective at a
future time, a majority of the directors then in office, including
those who have so resigned, shall have the power to fill such vacancy
or vacancies, the vote thereon to take effect when such resignation or
resignations shall become effective, and each director so chosen shall
hold office as herein provided in the filling of other vacancies.
Section 4. Removal. At a meeting of shareholders called
-------
expressly for that purpose and by a vote of the holders of
<PAGE>
a majority of the shares then entitled to vote at an election of the
directors, any director or the entire board of directors may be
removed, with or without cause. If less than the entire board is to
be removed, no one of the directors may be removed if the votes cast
against his removal would be sufficient to elect him if then
cumulatively voted at an election of the entire board of directors.
Section 5. Quorum. A majority of the number of
------
directors then serving shall constitute a quorum for the transaction
of business at any meeting of the board of directors, but if less than
such majority is present at a meeting, the majority of the directors
present may adjourn the meeting from time to time without further
notice.
Section 6. Manner of Acting. The act of the majority of
----------------
the directors present at a meeting at which a quorum is present shall
be the act of the board of directors.
Section 7. Regular and Special Meetings. Meetings of
----------------------------
the board of directors, regular or special, may be hold either within
or without the state, and may be held by means of conference telephone
or similar communications equipment by means of which all persons
participating in the meeting can hear each other, their participation
in such a meeting to constitute presence in person.
<PAGE>
Regular meetings of the board of directors may be held with
or without notice as otherwise prescribed for special meetings
hereinafter. said regular meetings shall be held immediately after,
and at the same place as, the annual meeting of shareholders.
Special meetings of the board of directors may by called by
or at the request of the president or a majority of the board of
directors.
Section 8. Notice. Notice of any special meeting shall
------
be given at least two (2) days previous thereto by written notice
delivered personally, by telegram, or mailed to each director at his
business address. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail, so addressed, with
postage thereon prepaid. If notice be given by telegram, such notice
shall be deemed to be delivered when the telegram is delivered to the
telegraph company.
Neither the business to be transacted at, nor the purpose
of, any regular or special meeting of the board of directors need be
specified in the notice or waiver of notice of such meeting.
Section 9. Action Without a Meeting. Any action
------------------------
required or permitted to be taken by the board of directors at a
meeting, may be taken without a meeting if all directors consent
<PAGE>
thereto in writing. Such consent shall have the same effect as a
unanimous vote.
Section 10. Compensation. By resolution of the board of
------------
directors, each director may be paid his expenses, if any, of
attendance at each meeting of the board of directors, and may be paid
a stated salary as director or a fixed sum for attendance at each
meeting of the board of directors or both. No such payment shall
preclude any director from serving the corporation in any other
capacity such as an office of specifically designated agent and
receiving compensation therefor.
Section 11. Presumption of Assent. A director of the
---------------------
corporation who is present at a meeting of the board of directors at
which action on any corporate matter is taken shall be presumed to
have assented to the action unless his dissent shall be entered in the
minutes of the meeting or unless he shall file his written dissent to
such action with the secretary of the meeting before the adjournment
thereof or shall forward such dissent by registered or certified mail
to the secretary of the corporation before 5:00 of the afternoon of
the next day which is not a holiday or a Saturday after the
adjournment of the meeting. Such right to dissent shall not apply to
a director who voted in favor of such action.
<PAGE>
ARTICLE IV
Officers
--------
Section 1. Number. The officers of the corporation
------
shall be a president, one or more vice-presidents (the number thereof
to be determined by the board of directors), a secretary, and a
treasurer, each of whom shall be elected by the board of directors.
Such other officers, assistant officers and agents as may be deemed
necessary may be elected or appointed by the board of directors. Any
two or more offices may be held by the same person, except the offices
of president and secretary.
Section 2. Election and Term of Office. The officers of
---------------------------
the corporation shall be elected annually by the board of directors at
the first meeting of the board of directors held after each annual
meeting of the shareholders. If the election of officers shall not be
held at such meeting, such election shall be held as soon thereafter
as conveniently possible. Each officer shall hold office until his
successor shall have been duly elected and shall have qualified or
until his death or until he shall resign or until be shall have been
removed in the manner hereinafter provided.
Section 3. Removal. Any officer or agent may be removed
-------
by the board of directors whenever in its judgment the best interests
of the corporation will be served thereby, but
<PAGE>
such removal shall be without prejudice to the contract rights, if
any, of the person so removed. Election or appointment of an officer
or agent shall not of itself create contract rights.
Section 4. Vacancies. A vacancy in any office because
---------
of death, resignation, removal, disqualification, or any other reason,
may be filled by the board of directors for the unexpired portion of
the term.
Section 5. President. The president shall be the
---------
principal executive officer of the corporation and, subject to the
control of the board of directors, shall in general supervise and
control all of the business and affairs of the corporation. He may
sign, with the secretary or any other proper officer of the
corporation duly authorized by the board of directors, certificate of
stock, deeds, mortgages, bonds, contracts, instruments of conveyance,
checks, drafts, notes, and other instruments which the board of
directors has authorized to be executed, except in cases where the
signing and execution thereof shall be otherwise expressly delegated
by the board of directors, these Bylaws or law. The president, in
general, shall perform all duties incident to the office of president
and such other duties as may be prescribed by the board of directors
from time to time.
Section 6. Vice-Presidents. In the absence of the
---------------
president or in the event of his death, inability or refusal to
<PAGE>
act, the vice-president (or in the event there be more than one vice-
president, the vice-presidents in the order designated at the time of
their election, or in the absence of any designation, then in the
order of their election) shall perform the duties and exercise the
powers of the president. Any vice-president shall have such powers
and perform such duties as may be delegated to him by the board of
directors.
Section 7. Secretary. The secretary shall (a) keep the
---------
minutes of all meetings of the board of directors and of the
stockholders, (b) see that all notices are duly given in accordance
with the provisions of these Bylaws or as required by law, (c) have
charge of all the corporate books, records and accounts and of the
seal of the corporation (d) see that the seal of the corporation is
affixed to all documents the execution of which on behalf of the
corporation under its seal is duly authorized, (e) keep a register of
the post office address of each shareholder which shall be furnished
to the corporation by such shareholder, (f) sign with the president,
or a vice-president, certificates for shares of the corporation, (g)
have general charge of the stock transfer books of the corporation,
and (h) in general perform all of the duties incident to the office of
secretary, subject to the control of the board of directors.
<PAGE>
Section 8. Assistant Secretary. The assistant
-------------------
secretary, in the absence or disability of the secretary, shall
perform the duties and exercise the power of the secretary.
Section 9. Treasurer. The treasurer shall (a) have
---------
charge and custody of all funds and securities of the corporation, (b)
receive and give receipt for monies due and payable to the corporation
from any source whatsoever, and deposit all such monies in the name of
the corporation in such banks, trust companies or other depositories
as shall be selected by the board of directors, and (c) in general,
perform all of the duties incident to the office of treasurer and such
other duties as from time to time may be assigned to him by the
president or by the board of directors.
Section 10. Assistant Treasurer. The assistant
-------------------
treasurer, in the absence or disability of the treasurer, shall
perform the duties and exercise the powers of the treasurer.
Section 11. Salaries. The compensation of all officers
--------
shall be fixed by resolution of the board of directors, except that
the board of directors may authorize the President and/or the Vice-
President to fix any compensation of any officer not exceeding a total
amount or amounts specified by the board of directors.
<PAGE>
ARTICLE V
Contracts, Loans, Checks and Deposits
-------------------------------------
Section 1. Contracts. The board of directors may
---------
authorize any officer, agent or agents, to enter into any contract or
execute and deliver any instrument in the name of and on behalf of the
corporation, and such authority may be general or confined to specific
instances.
Section 2. Loans. No loans shall be contracted on
-----
behalf of the corporation and no evidences of indebtedness shall be
issued in its name unless authorized by a resolution of the board of
directors. Such authority may be general or confined to specific
instances.
Section 3. Checks and Other Instruments. All checks,
----------------------------
drafts or other orders for the payment of money, notes or other
evidences of indebtedness issued in the name of the corporation shall
be signed by such officer or officers, agent or agents of the
corporation and in such manner as shall from time to time be
determined by resolution of the board of directors.
Section 4. Deposits. All funds of the corporation not
--------
otherwise employed shall be deposited to the credit of the corporation
in such banks, trust companies or other depositories as the board of
directors may select.
<PAGE>
ARTICLE VI
Certificates for Shares and Their Transfer
------------------------------------------
Section 1. Certificates for Shares. Certificates
-----------------------
representing the shares of the corporation shall be in such form as
shall be determined by the board of directors. Such certificates
shall be signed by the president or vice-president and by the
secretary or an assistant secretary of the corporation, and may be
sealed with the seal of the corporation or a facsimile thereof. The
signatures of such officers upon a certificate may be facsimiles if
the certificate is countersigned by a transfer agent or registered by
a registrar, other than the corporation itself or an employee of the
corporation. No certificate shall be issued for any share until such
share is fully paid.
If the corporation is authorized to issue shares of more
than one class, every certificate representing shares issued by the
corporation shall set forth or summarize upon the face or back of the
certificate, or shall state, that the corporation will furnish to any
shareholder upon request and without charge, a full statement of the
designations, preferences, limitations and relative rights of the
shares of each class authorized to be issued, together with the
variations in the relative rights and preferences between the various
shares.
Each certificate representing shares shall state upon the
face thereof (a) that the corporation is organized under the
<PAGE>
laws of the State of Arizona, (b) the name of the person to whom
issued, (c) the number, class and designation of the series, if any,
which the certificate represents, and (d) the par value of each share
represented by the certificate or a statement that the shares are
without par value.
Any restriction on the right to transfer shares and any
reservation of lien on the shares shall be noted on the face or the
back of the certificate by providing (a) a statement of the terms of
such restriction or reservation, (b) a summary of the terms of such
restriction or reservation and a statement that the corporation will
mail to the shareholder a copy of such restrictions or reservations
without charge within five (5) days after receipt of written notice
therefor, (c) if the restriction or reservation is contained in the
Articles of Incorporation or Bylaws of the corporation, or in an
instrument in writing to which the corporation is a party, a statement
to that effect and a statement that the corporation will mail to the
shareholder a copy of such restriction or reservation without charge
within five (5) days after receipt of written request therefor, or (d)
if each such restriction or reservation is contained in an instrument
in writing to which the corporation is not a party, a statement to
that effect.
Each certificate for shares shall be consecutively numbered
or otherwise identified.
<PAGE>
Section 2. Transfer of Share. Shares of the stock of
-----------------
the corporation shall be transferred on the stock transfer books of
the corporation only by the holder thereof, or by his duly authorized
representative, upon surrender of the certificate of a like number of
shares properly endorsed.
ARTICLE VII
Dividends
---------
The board of directors may, from time to time, declare and
the corporation may pay dividends on the outstanding shares in the
manner and upon the terms and conditions provided by law.
ARTICLE VIII
Corporate Seal
--------------
The board of directors may provide a corporate seal which,
in such event, shall be circular in form, shall have inscribed thereon
the name of the corporation, the year of its incorporation, and the
state of incorporation. The seal shall be in the custody of the
secretary.
ARTICLE IX
Waiver Of Notice
----------------
Whenever any notice is required to be given to any
shareholder or director of the corporation, a waiver thereof in
writing signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be equivalent
to the giving of such notice. Attendance of a person
<PAGE>
at a meeting shall constitute a waiver of notice of such meeting,
except when the person attends such meeting for the express purpose of
objecting to the transaction of any business because the meeting is
not lawfully called or convened.
ARTICLE X
Amendment of Bylaws
-------------------
These Bylaws may be altered, amended or repealed and new
Bylaws may be adopted by a vote of the majority of the board of
directors or by the affirmative vote of a majority of the stock issued
and outstanding and entitled to vote thereon.
<PAGE>
CERTIFICATE
I, Leland J. Buttle, the duly elected, qualified and acting
Secretary of American Check Exchange, Inc., an Arizona corporation, do
hereby certify that the above and foregoing are the Bylaws of this
corporation duly and regularly adopted by the directors thereof at a
meeting duly and regularly called and held at Phoenix, Arizona, on the
6th day of May, 1983.
IN WITNESS WHEREOF, I have hereunto set my hand on this 27
day of May, 1983.
/s/ Leland J. Buttle
---------------------------
Secretary
NYFS06...:\47\41847\0008\1710\ARTD116R.320
Exhibit 3.2(d)(i)
<PAGE>
BY-LAWS
OF
CHECK MART OF LOUISIANA, INC.
(A LOUISIANA CORPORATION)
-----------
ARTICLE I
Shareholders
------------
SECTION 1. Annual Meeting. The annual meeting of share
--------------
holders for the election of directors and for the transaction of such
other business as may properly come before the meeting shall be held
at the office of the Corporation in the State of Louisiana or at such
other place within or without the State of Louisiana as may be deter-
mined by the Board of Directors and as shall be designated in the
notice of said meeting, on such date and at such time as may be
determined by the Board of Directors.
SECTION 2. Special Meetings. Special meetings of the
----------------
shareholders for the transaction of such business as may properly come
before the meeting shall be held at the office of the Corporation in
the State of Louisiana, or at such other place within or without the
State of Louisiana as may be designated from time to time by the Board
of Directors. Whenever the Board of Directors shall fail to fix such
place, or whenever shareholders entitled to call a special meeting
shall call the same, the meeting shall be held at the office of the
Corporation in the State of Louisiana. Special meetings of the
shareholders shall be held upon call of the Board of Directors or of
the President or any Vice-President or the Secretary or any director,
at such time as may be fixed by the Board of Directors or the
President or such Vice-President or the Secretary or such director, as
the case may be, and as shall be stated in the notice of said meeting,
except when the Business Corporation Law of the State of Louisiana
(the "Business Corporation Law") confers upon the shareholders the
right to demand the call of such meeting and fix the date thereof.
SECTION 3. Notice of Meetings. The notice of all meetings
------------------
of shareholders shall be in writing, shall state the place, date and
hour of the meeting and, unless it is the annual meeting, shall
indicate that it is being issued by or at the direction of the person
or persons calling the meeting. The notice of an annual meeting of
shareholders shall state that the
<PAGE>
meeting is called for the election of directors and for the
transaction of such other business as may properly come before the
meeting and shall state the purpose or purposes of the meeting if any
other action is to be taken at such annual meeting which could be
taken at a special meeting. The notice of a special meeting shall, in
all instances, state the purpose or purposes for which the meeting is
called. A copy of the notice of any meeting shall be served either
personally or by first class mail, in accordance with the provisions
of the Business Corporation Law, to each shareholder at such
shareholder's record address or at such other address as such
shareholder may have furnished by request in writing to the Secretary
of the Corporation. If a meeting is adjourned to another time or
place and if any announcement of the adjourned time or place is made
at the meeting, it shall not be necessary to give notice of the
adjourned meeting unless the Board of Directors, after adjournment,
fixes a new record date for the adjourned meeting. Notice of a
meeting need not be given to any shareholder who submits a signed
waiver of notice before or after the meeting. The attendance of a
shareholder at a meeting without protesting prior to the conclusion of
the meeting the lack of notice of such meeting shall constitute a
waiver of notice by such shareholder.
SECTION 4. Shareholder Lists. A list of shareholders as of
-----------------
the record date, certified by the corporate officer responsible for
its preparation, or by the transfer agent, if any, shall be produced
at any meeting of shareholders upon the request thereat or prior
thereto of any shareholder. If the right to vote at any meeting is
challenged, the inspectors of election, if any, or the person
presiding thereat, shall require such list of shareholders to be
produced as evidence of the right of the persons challenged to vote at
such meeting, and all persons who appear from such list to be
shareholders entitled to vote thereat may vote at such meeting.
SECTION 5. Quorum. Except as otherwise provided by law or
------
the Corporation's Articles of Incorporation, a quorum for the
transaction of business at any meeting of shareholders shall consist
of the holders of record of a majority of the issued and outstanding
shares of the capital stock of the Corporation entitled to vote at the
meeting, present in person or by proxy. At all meetings of the
shareholders at which a quorum is present, all matters, except as
otherwise provided by law, in the Articles of Incorporation or in
Section 7 hereunder, shall be decided by the vote of the holders of a
majority of the shares entitled to vote thereat, that are present in
person or by proxy. If there be no such quorum, the holders of a
majority of such shares so present or represented may adjourn the
meeting from time to time,
<PAGE>
without further notice, until a quorum shall have been obtained. When
a quorum is once present to organize a meeting, it is not broken by
the subsequent withdrawal of any shareholder.
SECTION 6. Organization. Meetings of shareholders shall be
------------
presided over by the Chairman, if any, or if none or in the Chairman's
absence the President, or if none or in the President's absence a
Vice-President, or, if none of the foregoing is present, by a chairman
to be chosen by the shareholders entitled to vote who are present in
person or by proxy at the meeting. The Secretary of the Corporation,
or in the Secretary's absence an Assistant Secretary, shall act as
secretary of every meeting, but if neither the Secretary nor an
Assistant Secretary is present, the presiding officer of the meeting
shall choose any person present to act as secretary of the meeting.
SECTION 7. Voting; Proxies; Required Vote; Ballots. At
---------------------------------------
each meeting of shareholders, every shareholder shall be entitled to
vote in person or by proxy appointed by instrument in writing,
subscribed by such shareholder or by such shareholder's duly
authorized attorney-in-fact, and shall have one vote for each share
entitled to vote and registered in such shareholder's name on the
books of the Corporation on the applicable record date fixed pursuant
to these By-laws. No proxy shall be valid after the expiration of 11
months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the shareholder
executing it, except as otherwise provided by the Business Corporation
Law. At all elections of directors the voting may but need not be by
ballot and a plurality of the votes cast thereat shall elect. Except
as otherwise required by law or the Articles of Incorporation, any
other action shall be authorized by a majority of the votes cast.
SECTION 8. Inspectors. The Board of Directors, in advance
----------
of any meeting, may appoint one or more inspectors to act at the
meeting or any adjournment thereof. If an inspector or inspectors are
not so appointed, the person presiding at the meeting may, and on the
request of any shareholder shall, appoint one or more inspectors. In
case any person appointed fails to appear or act, the vacancy may be
filled by appointment made by the Board of Directors in advance of the
meeting or at the meeting by the person presiding thereat. Each
inspector, if any, before entering upon the discharge of such
inspector's duties, shall take and sign an oath to execute faithfully
the duties of inspector at such meeting with strict impartiality and
according to the best of such inspector's ability. The inspectors, if
any, shall determine the number of shares outstanding and the voting
power of each, the shares represented at the meeting, the
<PAGE>
existence of a quorum, and the validity and effect of proxies, and
shall receive votes, ballots or consents, hear and determine all
challenges and questions arising in connection with the right to vote,
count and tabulate all votes, ballots or consents, determine the
result, and do such acts as are proper to conduct the election or vote
with fairness to all shareholders. On request of the person presiding
at the meeting or any shareholder, the inspectors shall make a report
in writing of any challenge, question or matter determined by them and
execute a certificate as to any fact found by them.
SECTION 9. Actions Without Meetings. Whenever shareholders
------------------------
are required or permitted to take any action by vote, such action may
be taken without a meeting on written consent, setting forth the
action so taken, signed by the holders of all outstanding shares
entitled to vote thereon.
SECTION 10. Meaning of Certain Terms. As used herein in
------------------------
respect of the right to notice of a meeting of shareholders or a
waiver thereof or to participate or vote thereat or to consent or
dissent in writing in lieu of a meeting, as the case may be, the terms
"share" and "shareholder" or "shareholders" refer to an outstanding
share or shares and to a holder or holders of record of outstanding
shares, respectively, when the Corporation is authorized to issue only
one class of shares, and said references are also intended to include
any outstanding share or shares and any holder or holders of record of
outstanding shares of any class upon which or upon whom the Articles
of Incorporation confers such rights, where there are two or more
classes or series of shares, or upon which or upon whom the Business
Corporation Law confers such rights, notwithstanding that the Articles
of Incorporation may provide for more than one class or series of
shares, one or more of which are limited in or denied such rights
thereunder.
<PAGE>
ARTICLE II
Board of Directors
------------------
SECTION 1. General Powers. The business, property and
--------------
affairs of the Corporation shall be managed by or under the direction
of its Board of Directors.
SECTION 2. Qualification; Number; Term. (a) Each director
---------------------------
shall be at least 18 years of age. A director need not be a
shareholder, a citizen of the United States, or a resident of the
State of Louisiana. The number of directors constituting the entire
Board of Directors shall be at least three, except that where all the
shares are owned beneficially and of record by fewer than three
shareholders, the number of directors may be less than three but not
less than the number of shareholders. Subject to the foregoing
limitation and except for the first Board of Directors, such number
may be fixed from time to time by action of the Board of Directors or
of the shareholders, or, if the number of directors is not so fixed,
the number shall be three. The number of directors may be increased
or decreased by action of the Board of Directors or shareholders,
provided that any action of the Board of Directors to effect such
increase or decrease shall require the vote of a majority of the
entire Board of Directors. The use of the phrase "entire Board of
Directors" herein refers to the total number of directors which the
Corporation would have if there were no vacancies.
(b) The first Board of Directors shall be elected by the
incorporator or incorporators of the Corporation and shall hold office
until the first annual meeting of shareholders or until their
respective successors have been elected and qualified. Thereafter,
directors who are elected at an annual meeting of shareholders, and
directors who are elected in the interim to fill vacancies and newly
created directorships, shall hold office until the next annual meeting
of shareholders and until their respective successors have been
elected and qualified. In the interim between annual meetings of
shareholders or special meetings of shareholders called for the
election of directors, newly created directorships and any vacancies
in the Board of Directors, including vacancies resulting from the
removal of directors for cause or without cause, may be filled by the
vote of a majority of the directors then in office, although less than
a quorum exists.
SECTION 3. Quorum and Manner of Voting. A majority of the
---------------------------
entire Board of Directors shall constitute a quorum for the
transaction of business. A majority of the directors present,
<PAGE>
whether or not a quorum is present, may adjourn a meeting to another
time and place. Except as herein otherwise provided, the vote of a
majority of the directors present at the time of the vote, at a
meeting duly assembled, a quorum being present at such time, shall be
the act of the Board of Directors.
SECTION 4. Places of Meetings. Meetings of the Board of
------------------
Directors shall be held at such place within or without the State of
Louisiana as may from time to time be determined by the Board of
Directors, or as may be specified in the notice of the meeting.
Regular meetings of the Board of Directors shall be held at such times
and places as may from time to time be fixed by resolution of the
Board of Directors, and special meetings may be held at any time and
place upon the call of the Chairman of the Board, if any, or of the
President or any Vice-President or the Secretary or any director by
oral, telegraphic or notice duly served as set forth in these By-laws.
SECTION 5. Annual Meeting. Following the annual meeting of
--------------
shareholders, the newly elected Board of Directors shall meet for the
purpose of the election of officers and the transaction of such other
business as may properly come before the meeting. Such meeting may be
held without notice immediately after the annual meeting of
shareholders at the same place at which such shareholders' meeting is
held.
SECTION 6. Notice of Meetings. A notice of the place,
------------------
date, time and purpose or purposes of each meeting of the Board of
Directors shall be given to each director by mailing the same at least
two days before the meeting, or by telegraphing or telephoning the
same or by delivering the same personally not later than the day
before the day of the meeting. Notice need not be given of regular
meetings of the Board of Directors. Any requirements of furnishing a
notice shall be waived by any director who signs a waiver of notice
before or after the meeting, or who attends the meeting without
protesting, prior thereto or at its commencement, the lack of notice
to such director. The notice of any meeting need not specify the
purpose of the meeting, and any and all business may be transacted at
such meeting.
SECTION 7. Organization. At all meetings of the Board of
------------
Directors, the Chairman, if any, or if none or in the Chairman's
absence or inability to act the President, or in the President's
absence or inability to act any Vice-President who is a member of the
Board of Directors, or in such Vice-President's absence or inability
to act a chairman chosen by the directors, shall preside. The
Secretary of the Corporation shall act as secretary at all meetings of
the Board of Directors when present,
<PAGE>
and in the Secretary's absence, the presiding officer may appoint any
person to act as secretary.
SECTION 8. Resignation. Any director may resign at any
-----------
time upon written notice to the Corporation and such resignation shall
take effect upon receipt thereof by the President or Secretary, unless
otherwise specified in the resignation. Except as otherwise provided
by law or by the Articles of Incorporation, any or all of the
directors may be removed, with or without cause, by the holders of a
majority of the shares of stock outstanding and entitled to vote for
the election of directors.
SECTION 9. Vacancies. Unless otherwise provided in these
---------
By-laws, vacancies among the directors, whether caused by resignation,
death, disqualification, removal, an increase in the authorized number
of directors or otherwise, may be filled by the affirmative vote of a
majority of the remaining directors, although less than a quorum, or
by a sole remaining director, or, at a special meeting of the
shareholders, by the holders of shares entitled to vote for the
election of directors.
SECTION 10. Actions by Written Consent. Any action
--------------------------
required or permitted to be taken by the Board of Directors or by any
committee thereof may be taken without a meeting if all members of the
Board of Directors or of any such committee consent in writing to the
adoption of a resolution authorizing the action and the writing or
writings are filed with the minutes of the proceedings of the Board of
Directors or of any such committee.
SECTION 11. Electronic Communication. Any one or more
------------------------
members of the Board of Directors or any committee thereof may
participate in a meeting of the Board of Directors or any such
committee by means of a conference telephone or similar communications
equipment allowing all persons participating in the meeting to hear
each other at the same time. Participation by such means shall
constitute presence in person at a meeting.
ARTICLE III
Committees of the Board of Directors
------------------------------------
SECTION 1. Appointment. From time to time the Board of
-----------
Directors by a resolution adopted by a majority of the whole Board may
appoint any committee or committees for any purpose or purposes, to
the extent lawful, which shall have powers as shall be determined and
specified by the Board of Directors in the
<PAGE>
resolution of appointment. The Board of Directors shall have full
power, at any time, to fill vacancies in, to change membership of, to
designate alternate members of, or to discharge any such committee.
SECTION 2. Procedures, Quorum and Manner of Acting. Each
---------------------------------------
committee shall fix its own rules of procedure, and shall meet where
and as provided by such rules or by resolution of the Board of
Directors. Except as otherwise provided by law, the presence of a
majority of the then appointed members of a committee shall constitute
a quorum for the transaction of business by that committee, and in
every case where a quorum is present the affirmative vote of a
majority of the members of the committee present shall be the act of
the committee. Each committee shall keep minutes of its proceedings,
and actions taken by a committee shall be reported to the Board of
Directors.
SECTION 3. Action by Written Consent. Any action required
-------------------------
or permitted to be taken at any meeting of any committee of the Board
may be taken without a meeting if all the members of the committee
consent thereto in writing, and the writing or writings are filed with
the minutes of proceedings of the committee.
SECTION 4. Term; Termination. In the event any person
-----------------
shall cease to be a director of the Corporation, such person shall
simultaneously therewith cease to be a member of any committee
appointed by the Board of Directors.
ARTICLE IV
Officers
--------
SECTION 1. Election and Qualifications. The Board of
---------------------------
Directors shall elect the officers of the Corporation, which shall
include a President and a Secretary, and may include, by election or
appointment, one or more Vice-Presidents (any one or more of whom may
be given an additional designation of rank or function), a Treasurer
and such other officers as the Board may from time to time deem
proper. Each officer shall have such powers and duties as may be
prescribed by these By-laws and as may be assigned by the Board of
Directors or the President. Up to two offices may be held by the same
person, except that no officer shall execute, acknowledge, or verify
any instrument in more than one capacity if such instrument is
required by law or by the By-laws to be executed, acknowledged, or
verified by two or more officers. When all of the issued and
outstanding stock
<PAGE>
of the Corporation is owned by one person, such person may hold all or
any combination of offices.
SECTION 2. Term of Office and Remuneration. The term of
-------------------------------
office of all officers shall be one year and until their respective
successors have been selected and qualified, but any officer may be
removed from office, either with or without cause, at any time by the
Board of Directors. Any vacancy in any office arising from any cause
may be filled for the unexpired portion of the term by the Board of
Directors.
SECTION 3. Resignation; Removal. Any officer may resign at
--------------------
any time upon written notice to the Corporation and such resignation
shall take effect upon receipt thereof by the President or Secretary,
unless otherwise specified in the resignation. Any officer shall be
subject to removal, with or without cause, at any time by vote of a
majority of the whole Board.
SECTION 4. Chairman of the Board. The Chairman of the
---------------------
Board of Directors, if there be one, shall preside at all meetings of
the Board of Directors and shall have such other powers and duties as
may from time to time be assigned by the Board of Directors.
SECTION 5. President. The President shall be the Chief
---------
Executive Officer of the Corporation and shall have general management
and supervision of the property, business and affairs of the Corpora-
tion and over its other officers. The President shall preside at all
meetings of the shareholders and, in the absence or disability of the
Chairman of the Board of Directors, or if there be no Chairman, shall
preside at all meetings of the Board of Directors. The President may
execute and deliver in the name of the Corporation powers of attorney,
contracts, bonds and other obligations and instruments, except in
cases where the signing and execution thereof shall be expressly
delegated by the Board of Directors, or by these By-laws, to some
other officer or agent of the Corporation.
SECTION 6. Vice-President. A Vice-President may execute
--------------
and deliver in the name of the Corporation contracts and other
obligations and instruments pertaining to the regular course of such
Vice-President's duties, and shall have such other authority as from
time to time may be assigned by the Board of Directors or the
President.
SECTION 7. Treasurer. The Treasurer shall in general have
---------
all duties incident to the position of Treasurer and such
<PAGE>
other duties as may be assigned by the Board of Directors or the
President.
SECTION 8. Secretary. The Secretary shall in general have
---------
all the duties incident to the office of Secretary and such other
duties as may be assigned by the Board of Directors or the President.
SECTION 9. Assistant Officers. Any assistant officer shall
------------------
have such powers and duties of the officer such assistant officer
assists as such officer or the Board of Directors shall from time to
time prescribe.
ARTICLE V
Books and Records
-----------------
SECTION 1. Location. The Corporation shall keep correct
--------
and complete books and records of account and shall keep minutes of
the proceedings of the shareholders, of the Board of Directors, and/or
of any committee which the Board of Directors may appoint, and shall
keep at the office of the Corporation in or outside the State of
Louisiana or at the office of the transfer agent or registrar, if any,
in said state a record containing the names and addresses of all
shareholders, the number and class of shares held by each, and the
dates when such shareholders respectively became the owners of record
thereof. Any of the foregoing books, minutes or records may be in
written form or in any other form capable of being converted into
written form within a reasonable time.
SECTION 2. Addresses of Shareholders. Notices of meetings
-------------------------
and all other corporate notices may be delivered personally or mailed
to each shareholder at said shareholder's address as it appears on the
records of the Corporation.
SECTION 3. Fixing Date for Determination of Shareholders of
------------------------------------------------
Record. For the purpose of determining the shareholders entitled to
------
notice of or to vote at any meeting of shareholders or any adjournment
thereof, or to express to consent to or dissent from any proposal
without a meeting, or for the purpose of determining shareholders
entitled to receive payment of any dividend or the allotment of any
rights, or for the purpose of any other action, the Board of Directors
may fix, in advance, a record date, in accordance with the provisions
of the Business Corporation Law. If no record date is fixed, the
record date for determining shareholders entitled to notice of or to
vote at a meeting of shareholders shall be at the close of
<PAGE>
business on the day next preceding the day on which notice is given,
or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held. The record date for
determining shareholders for any purpose other than that specified in
the preceding sentence shall be at the close of business on the day on
which the Board of Directors adopts the resolution relating thereto.
A determination of shareholders of record entitled to notice of or to
vote at a meeting of shareholders shall apply to any adjournment of
the meeting; provided, however, that the Board of Directors may fix a
new record date for the adjourned meeting.
ARTICLE VI
Certificates Representing Shares
--------------------------------
SECTION 1. Certificates; Signatures. (a) The shares of
------------------------
the Corporation shall be represented by certificates representing
shares, in such form as the Board of Directors may from time to time
prescribe, or shall be uncertificated shares. Certificates
representing shares shall have set forth thereon the statements
prescribed by law and shall be signed by the Chairman of the Board or
the President or a Vice-President and by the Secretary or an Assistant
Secretary or a Treasurer or an Assistant Treasurer and may be sealed
with the corporate seal or a facsimile thereof. Any and all
signatures on any such certificate may be facsimiles if the
certificate is countersigned by a transfer agent or registered by a
registrar other than the Corporation itself or its employee, or the
shares are listed on a registered national securities exchange. In
case any officer who has signed or whose facsimile signature has been
placed upon a certificate shall have ceased to be such officer before
such certificate is issued, it may be issued by the Corporation with
the same effect as if such officer were an officer at the date of its
issue.
(b) Each certificate representing shares issued by the
Corporation, if the Corporation is authorized to issue shares of more
than one class, shall set forth upon the face or back of the
certificate, or shall state that the Corporation will furnish to any
shareholder upon request and without charge, a full statement of the
designation, relative rights, preferences and limitations of the
shares of each class authorized to be issued and, if the Corporation
is authorized to issue any class of preferred shares in series, the
designation, relative rights, preferences and limitations of each such
series so far as the same have been fixed and the authority of the
Board of Directors to designate
<PAGE>
and fix the relative rights, preferences and limitations of other
series.
(c) Each certificate representing shares shall state upon
the face thereof:
(1) That the Corporation is formed under the laws of the
State of Louisiana;
(2) The name of the person or persons to whom issued;
(3) The number and class of shares, the par value of the
shares represented thereby, and the designation of the
series, if any, which such certificate represents; and
(4) The name of the Corporation.
(d) The name of the holder of record of the shares
represented thereby, with the number of shares and the date of issue,
shall be entered on the books of the Corporation.
SECTION 2. Transfer of Shares. Upon compliance with
------------------
provisions governing or restricting the transferability of shares, if
any, transfers of shares of the Corporation shall be made only on the
share record of the Corporation by the registered holder thereof, or
by such holder's attorney-in-fact thereunto authorized by power of
attorney duly executed and filed with the Secretary of the Corporation
or with a transfer agent or a registrar, if any, and upon the
surrender of the certificate or certificates for such shares properly
endorsed and the payment of all taxes due thereon, if any. A
certificate representing shares shall not be issued until the full
amount of consideration therefor has been paid, except as the Business
Corporation Law may otherwise permit.
SECTION 3. Fractional Shares. The Corporation may, but
-----------------
shall not be required to, issue certificates for fractions of a share
where necessary to effect transactions authorized by the Business
Corporation Law, which shall entitle the holder, in proportion to such
holder's fractional holdings, to exercise voting rights, receive divi-
dends and participate in liquidating distributions; or the Corporation
may pay in cash the fair value of fractions of a share as of the time
when those entitled to receive such fractions are determined; or it
may issue scrip in registered or bearer form over the manual or
facsimile signature of an officer of the Corporation or of its agent,
exchangeable as therein provided for full shares, but such scrip shall
not entitle the holder to any rights of a shareholder except as
<PAGE>
therein provided. The Board of Directors shall have power and
authority to make all such rules and regulations as it may deem
expedient concerning the issue, transfer and registration of
certificates representing shares of the Corporation.
SECTION 4. Lost, Stolen or Destroyed Certificates. The
--------------------------------------
Corporation may issue a new certificate of stock in place of any
certificate, theretofore issued by it, alleged to have been lost,
stolen or destroyed, and the Board of Directors may require the owner
of any lost, stolen or destroyed certificate, or his legal
representative, to give the Corporation a bond sufficient to indemnify
the Corporation against any claim that may be made against it on
account of the alleged loss, theft or destruction of any such certi-
ficate or the issuance of any such new certificate.
ARTICLE VII
Dividends
---------
Subject always to the provisions of law and the Articles of
Incorporation, the Board of Directors shall have full power to
determine whether any, and, if any, what part of any, funds legally
available for the payment of dividends shall be declared as dividends
and paid to shareholders; the division of the whole or any part of
such funds of the Corporation shall rest wholly within the lawful dis-
cretion of the Board of Directors, and it shall not be required at any
time, against such discretion, to divide or pay any part of such funds
among or to the shareholders as dividends or otherwise; and before
payment of any dividend, there may be set aside out of any funds of
the Corporation available for dividends such sum or sums as the Board
of Directors from time to time, in its absolute discretion, thinks
proper as a reserve or reserves to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of
the Corporation, or for such other purpose as the Board of Directors
shall think conducive to the interest of the Corporation, and the
Board of Directors may modify or abolish any such reserve in the man-
ner in which it was created.
ARTICLE VIII
Ratification
------------
Any transaction, questioned in any law suit on the ground of
lack of authority, defective or irregular execution, adverse interest
of director, officer or shareholder,
<PAGE>
non-disclosure, miscomputation, or the application of improper
principles or practices of accounting, may be ratified, before or
after judgment, by the Board of Directors or by the shareholders and
if so ratified shall have the same force and effect as if the
questioned transaction had been originally duly authorized. Such
ratification shall be binding upon the Corporation and its
shareholders and shall constitute a bar to any claim or execution of
any judgment in respect of such questioned transaction.
ARTICLE IX
Corporate Seal
--------------
The corporate seal shall have inscribed thereon the name of
the Corporation and the year of its incorporation, and shall be in
such form and contain such other words and/or figures as the Board of
Directors shall determine. The corporate seal may be used by
printing, engraving, lithographing, stamping or otherwise making,
placing or affixing, or causing to be printed, engraved, lithographed,
stamped or otherwise made, placed or affixed, upon any paper or
document, by any process whatsoever, an impression, facsimile or other
reproduction of said corporate seal.
ARTICLE X
Fiscal Year
-----------
The fiscal year of the Corporation shall be fixed, and shall
be subject to change, by the Board of Directors. Unless otherwise
fixed by the Board of Directors, the fiscal year of the Corporation
shall be the calendar year.
ARTICLE XI
Waiver of Notice
----------------
Whenever notice is required to be given by these By-laws or
by the Articles of Incorporation or by law, a written waiver thereof,
signed by the person or persons entitled to said notice, whether
before or after the time stated therein, shall be deemed equivalent to
notice.
<PAGE>
ARTICLE XII
Indemnification
---------------
SECTION 1. General Scope. The Corporation, to the fullest
-------------
extent permitted and in the manner required by the laws of the State
of Louisiana as in effect at the time of the adoption of this Article
XII or as the law may be amended from time to time, shall, except as
set forth in Article XII, Section 2 below, (i) indemnify any officer
or director of the Corporation, or any other person designated by the
Board of Directors as being entitled to indemnification (and the heirs
and legal representatives of such person) made, or threatened to be
made, a party in an action or proceeding (including, without limita-
tion, one by or in the right of the Corporation to procure a judgment
in its favor), whether civil or criminal, including an action by or in
the right of any other corporation of any type or kind, domestic or
foreign, or any partnership, joint venture, trust, employee benefit
plan or other enterprise, which any indemnified representative served
in any capacity at the request of the Corporation, by reason of the
fact that such indemnified person, or such indemnified person's
testator or intestate, was a director or officer of the Corporation or
served such other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise in any capacity, and (ii)
provide to any such indemnified person (and the heirs and legal
representatives of such person) advances for expenses incurred in
pursuing such action or proceeding, upon receipt of an undertaking by
or on behalf of such indemnified person to repay such amount as, and
to the extent, required by the Business Corporation Law.
SECTION 2. Limitations on Indemnification. The Corporation
------------------------------
shall not indemnify any indemnified representative: (a) where such
indemnification is expressly prohibited by applicable law; (b) where
the conduct of the indemnified representative has been finally
determined (i) to constitute willful misconduct or recklessness or
(ii) to be based upon or attributable to the receipt by the
indemnified representative of a personal benefit from the Corporation
to which the indemnified representative is not legally entitled; or
(c) to the extent such indemnification has been determined to be
otherwise unlawful.
SECTION 3. Indemnification Not Exclusive. The rights
-----------------------------
granted by this Article shall not be deemed exclusive of any other
rights to which those seeking indemnification may be entitled under
any statute, agreement, vote of shareholders or disinterested
directors or otherwise. The indemnification provided by or granted
pursuant to this Article shall continue as to a person who has ceased
to be an indemnified representative in
<PAGE>
respect of matters arising prior to such time, and shall inure to the
benefit of the heirs, executors, administrators and personal
representatives of such a person.
SECTION 4. Contract Rights; Amendment or Repeal. All
------------------------------------
rights under this Article shall be deemed a contract between the
Corporation and the indemnified representative pursuant to which the
Corporation and each indemnified representative intend to be legally
bound. Any repeal, amendment or modification hereof shall be
prospective only and shall not affect any rights or obligations then
existing.
ARTICLE XIII
Bank Accounts, Drafts, Contracts, Etc.
--------------------------------------
SECTION 1. Bank Accounts and Drafts. In addition to such
------------------------
bank accounts as may be authorized by the Board of Directors, the
Treasurer or any person designated by the Treasurer, whether or not an
employee of the Corporation, may authorize such bank accounts to be
opened or maintained in the name and on behalf of the Corporation as
such person may deem necessary or appropriate, and may authorize pay-
ments from such bank accounts to be made upon and according to the
check of the Corporation in accordance with the written instructions
of the Treasurer, or other person so designated by the Treasurer.
SECTION 2. Contracts. The Board of Directors may authorize
---------
any person or persons, in the name and on behalf of the Corporation,
to enter into or execute and deliver any and all deeds, bonds,
mortgages, contracts and other obligations or instruments, and such
authority may be general or confined to specific instances.
SECTION 3. Proxies; Powers of Attorney; Other Instruments.
----------------------------------------------
The Chairman, the President or any other person designated by either
of them shall have the power and authority to execute and deliver
proxies, powers of attorney and other instruments on behalf of the
Corporation in connection with the rights and powers incident to the
ownership of stock by the Corporation. The Chairman, the President or
any other person authorized by proxy or power of attorney executed and
delivered by either of them on behalf of the Corporation may attend
and vote at any meeting of shareholders of any company in which the
Corporation may hold stock, and may exercise on behalf of the
Corporation any and all of the rights and powers incident to the
ownership of such stock at any such meeting, or otherwise as specified
in the proxy or power of attorney so authorizing any
<PAGE>
such person. The Board of Directors, from time to time, may confer
like powers upon any other person.
SECTION 4. Financial Reports. The directors may appoint
-----------------
the Treasurer or other fiscal officer and/or the Secretary or any
other officer to cause to be prepared and furnished to shareholders
entitled thereto any special financial notice and/or financial
statement, as the case may be, which may be required by any provision
of law.
ARTICLE XIV
Amendments
----------
The shareholders entitled to vote in the election of
directors may amend or repeal the By-laws and may adopt new By-laws.
Except as otherwise required by law or by the provisions of these
By-laws, the Board of Directors may also amend or repeal the By-laws
and adopt new By-laws, but By-laws adopted by the Board of Directors
may be amended or repealed by the said shareholders. Any change in
the By-laws shall take effect when adopted unless otherwise provided
for in the resolution effecting the change.
NYFS06...:\47\41847\0008\1710\BYLD126L.000
Exhibit 3.2(e)(i)
<PAGE>
BY-LAWS
OF
CHECK MART OF NEW JERSEY, INC.
(A NEW JERSEY CORPORATION)
-----------
ARTICLE I
Shareholders
-------------
SECTION 1. Annual Meeting. The annual meeting of share
--------------
holders for the election of directors and for the transaction of such
other business as may properly come before the meeting shall be held
at the office of the Corporation in the State of New Jersey or at such
other place within or without the State of New Jersey as may be deter-
mined by the Board of Directors and as shall be designated in the
notice of said meeting, on such date and at such time as may be de-
termined by the Board of Directors.
SECTION 2. Special Meetings. Special meetings of the
----------------
shareholders for the transaction of such business as may properly come
before the meeting shall be held at the office of the Corporation in
the State of New Jersey, or at such other place within or without the
State of New Jersey as may be designated from time to time by the
Board of Directors. Whenever the Board of Directors shall fail to fix
such place, or whenever shareholders entitled to call a special
meeting shall call the same, the meeting shall be held at the office
of the Corporation in the State of New Jersey. Special meetings of
the shareholders shall be held upon call of the Board of Directors or
of the President or any Vice-President or the Secretary or any
director, at such time as may be fixed by the Board of Directors or
the President or such Vice-President or the Secretary or such
director, as the case may be, and as shall be stated in the notice of
said meeting, except when the New Jersey Business Corporation Act of
the State of New Jersey (the "Business Corporation Law") confers upon
the shareholders the right to demand the call of such meeting and fix
the date thereof.
SECTION 3. Notice of Meetings. The notice of all meetings
------------------
of shareholders shall be in writing, shall state the place, date and
hour of the meeting and, unless it is the annual meeting, shall
indicate that it is being issued by or at the
<PAGE>
direction of the person or persons calling the meeting. The notice of
an annual meeting of shareholders shall state that the meeting is
called for the election of directors and for the transaction of such
other business as may properly come before the meeting and shall state
the purpose or purposes of the meeting if any other action is to be
taken at such annual meeting which could be taken at a special
meeting. The notice of a special meeting shall, in all instances,
state the purpose or purposes for which the meeting is called. A copy
of the notice of any meeting shall be served either personally or by
first class mail, in accordance with the provisions of the Business
Corporation Law, to each shareholder at such shareholder's record
address or at such other address as such shareholder may have
furnished by request in writing to the Secretary of the Corporation.
If a meeting is adjourned to another time or place and if any
announcement of the adjourned time or place is made at the meeting, it
shall not be necessary to give notice of the adjourned meeting unless
the Board of Directors, after adjournment, fixes a new record date for
the adjourned meeting. Notice of a meeting need not be given to any
shareholder who submits a signed waiver of notice before or after the
meeting. The attendance of a shareholder at a meeting without
protesting prior to the conclusion of the meeting the lack of notice
of such meeting shall constitute a waiver of notice by such
shareholder.
SECTION 4. Shareholder Lists. A list of shareholders as of
-----------------
the record date, certified by the corporate officer responsible for
its preparation, or by the transfer agent, if any, shall be produced
at any meeting of shareholders upon the request thereat or prior
thereto of any shareholder. If the right to vote at any meeting is
challenged, the inspectors of election, if any, or the person
presiding thereat, shall require such list of shareholders to be
produced as evidence of the right of the persons challenged to vote at
such meeting, and all persons who appear from such list to be
shareholders entitled to vote thereat may vote at such meeting.
SECTION 5. Quorum. Except as otherwise provided by law or
------
the Corporation's Certificate of Incorporation, a quorum for the
transaction of business at any meeting of shareholders shall consist
of the holders of record of a majority of the issued and outstanding
shares of the capital stock of the Corporation entitled to vote at the
meeting, present in person or by proxy. At all meetings of the
shareholders at which a quorum is present, all matters, except as
otherwise provided by law, in Section 7 hereunder or in the
Certificate of Incorporation, shall be decided by the vote of the
holders of a majority of the shares entitled to vote thereat, that are
present in person or by proxy.
<PAGE>
If there be no such quorum, the holders of a majority of such shares
so present or represented may adjourn the meeting from time to time,
without further notice, until a quorum shall have been obtained. When
a quorum is once present to organize a meeting, it is not broken by
the subsequent withdrawal of any shareholder.
SECTION 6. Organization. Meetings of shareholders shall be
------------
presided over by the Chairman, if any, or if none or in the Chairman's
absence the President, or if none or in the President's absence a
Vice-President, or, if none of the foregoing is present, by a chairman
to be chosen by the shareholders entitled to vote who are present in
person or by proxy at the meeting. The Secretary of the Corporation,
or in the Secretary's absence an Assistant Secretary, shall act as
secretary of every meeting, but if neither the Secretary nor an
Assistant Secretary is present, the presiding officer of the meeting
shall choose any person present to act as secretary of the meeting.
SECTION 7. Voting; Proxies; Required Vote; Ballots. At
---------------------------------------
each meeting of shareholders, every shareholder shall be entitled to
vote in person or by proxy appointed by instrument in writing,
subscribed by such shareholder or by such shareholder's duly
authorized attorney-in-fact, and shall have one vote for each share
entitled to vote and registered in such shareholder's name on the
books of the Corporation on the applicable record date fixed pursuant
to these By-laws. No proxy shall be valid after the expiration of 11
months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the shareholder
executing it, except as otherwise provided by the Business Corporation
Law. At all elections of directors the voting may but need not be by
ballot and a plurality of the votes cast thereat shall elect. Except
as otherwise required by law or the Certificate of Incorporation, any
other action shall be authorized by a majority of the votes cast.
SECTION 8. Inspectors. The Board of Directors, in advance
----------
of any meeting, may appoint one or more inspectors to act at the
meeting or any adjournment thereof. If an inspector or inspectors are
not so appointed, the person presiding at the meeting may, and on the
request of any shareholder shall, appoint one or more inspectors. In
case any person appointed fails to appear or act, the vacancy may be
filled by appointment made by the Board of Directors in advance of the
meeting or at the meeting by the person presiding thereat. Each
inspector, if any, before entering upon the discharge of such
inspector's duties,
<PAGE>
shall take and sign an oath to execute faithfully the duties of
inspector at such meeting with strict impartiality and according to
the best of such inspector's ability. The inspectors, if any, shall
determine the number of shares outstanding and the voting power of
each, the shares represented at the meeting, the existence of a
quorum, and the validity and effect of proxies, and shall receive
votes, ballots or consents, hear and determine all challenges and
questions arising in connection with the right to vote, count and
tabulate all votes, ballots or consents, determine the result, and do
such acts as are proper to conduct the election or vote with fairness
to all shareholders. On request of the person presiding at the
meeting or any shareholder, the inspectors shall make a report in
writing of any challenge, question or matter determined by them and
execute a certificate as to any fact found by them.
SECTION 9. Actions Without Meetings. Whenever shareholders
------------------------
are required or permitted to take any action by vote, such action may
be taken without a meeting on written consent, setting forth the
action so taken, signed by the holders of all outstanding shares
entitled to vote thereon.
SECTION 10. Meaning of Certain Terms. As used herein in
------------------------
respect of the right to notice of a meeting of shareholders or a
waiver thereof or to participate or vote thereat or to consent or
dissent in writing in lieu of a meeting, as the case may be, the terms
"share" and "shareholder" or "shareholders" refer to an outstanding
share or shares and to a holder or holders of record of outstanding
shares, respectively, when the Corporation is authorized to issue only
one class of shares, and said references are also intended to include
any outstanding share or shares and any holder or holders of record of
outstanding shares of any class upon which or upon whom the
Certificate of Incorporation confers such rights, where there are two
or more classes or series of shares, or upon which or upon whom the
Business Corporation Law confers such rights, notwithstanding that the
Certificate of Incorporation may provide for more than one class or
series of shares, one or more of which are limited in or denied such
rights thereunder.
ARTICLE II
Board of Directors
-------------------
SECTION 1. General Powers. The business, property and
--------------
affairs of the Corporation shall be managed by or under the direction
of its Board of Directors.
<PAGE>
SECTION 2. Qualification; Number; Term. (a) Each director
---------------------------
shall be at least 18 years of age. A director need not be a
shareholder, a citizen of the United States, or a resident of the
State of New Jersey. The number of directors constituting the entire
Board of Directors shall be at least three, except that where all the
shares are owned beneficially and of record by fewer than three
shareholders, the number of directors may be less than three but not
less than the number of shareholders. Subject to the foregoing
limitation and except for the first Board of Directors, such number
may be fixed from time to time by action of the Board of Directors or
of the shareholders, or, if the number of directors is not so fixed,
the number shall be three. The number of directors may be increased
or decreased by action of the Board of Directors or shareholders,
provided that any action of the Board of Directors to effect such
increase or decrease shall require the vote of a majority of the
entire Board of Directors. The use of the phrase "entire Board of
Directors" herein refers to the total number of directors which the
Corporation would have if there were no vacancies.
(b) The first Board of Directors shall be elected by the
incorporator or incorporators of the Corporation and shall hold office
until the first annual meeting of shareholders or until their
respective successors have been elected and qualified. Thereafter,
directors who are elected at an annual meeting of shareholders, and
directors who are elected in the interim to fill vacancies and newly
created directorships, shall hold office until the next annual meeting
of shareholders and until their respective successors have been
elected and qualified. In the interim between annual meetings of
shareholders or special meetings of shareholders called for the
election of directors, newly created directorships and any vacancies
in the Board of Directors, including vacancies resulting from the
removal of directors for cause or without cause, may be filled by the
vote of a majority of the directors then in office, although less than
a quorum exists.
SECTION 3. Quorum and Manner of Voting. A majority of the
---------------------------
entire Board of Directors shall constitute a quorum for the
transaction of business. A majority of the directors present, whether
or not a quorum is present, may adjourn a meeting to another time and
place. Except as herein otherwise provided, the vote of a majority of
the directors present at the time of the vote, at a meeting duly
assembled, a quorum being present at such time, shall be the act of
the Board of Directors.
<PAGE>
SECTION 4. Places of Meetings. Meetings of the Board of
------------------
Directors shall be held at such place within or without the State of
New Jersey as may from time to time be determined by the Board of
Directors, or as may be specified in the notice of the meeting.
Regular meetings of the Board of Directors shall be held at such times
and places as may from time to time be fixed by resolution of the
Board of Directors, and special meetings may be held at any time and
place upon the call of the Chairman of the Board, if any, or of the
President or any Vice-President or the Secretary or any director by
oral, telegraphic or notice duly served as set forth in these By-laws.
SECTION 5. Annual Meeting. Following the annual meeting of
--------------
shareholders, the newly elected Board of Directors shall meet for the
purpose of the election of officers and the transaction of such other
business as may properly come before the meeting. Such meeting may be
held without notice immediately after the annual meeting of
shareholders at the same place at which such shareholders' meeting is
held.
SECTION 6. Notice of Meetings. A notice of the place,
------------------
date, time and purpose or purposes of each meeting of the Board of
Directors shall be given to each director by mailing the same at least
two days before the meeting, or by telegraphing or telephoning the
same or by delivering the same personally not later than the day
before the day of the meeting. Notice need not be given of regular
meetings of the Board of Directors. Any requirements of furnishing a
notice shall be waived by any director who signs a waiver of notice
before or after the meeting, or who attends the meeting without
protesting, prior thereto or at its commencement, the lack of notice
to such director. The notice of any meeting need not specify the
purpose of the meeting, and any and all business may be transacted at
such meeting.
SECTION 7. Organization. At all meetings of the Board of
------------
Directors, the Chairman, if any, or if none or in the Chairman's
absence or inability to act the President, or in the President's
absence or inability to act any Vice-President who is a member of the
Board of Directors, or in such Vice-President's absence or inability
to act a chairman chosen by the directors, shall preside. The
Secretary of the Corporation shall act as secretary at all meetings of
the Board of Directors when present, and in the Secretary's absence,
the presiding officer may appoint any person to act as secretary.
<PAGE>
SECTION 8. Resignation. Any director may resign at any
-----------
time upon written notice to the Corporation and such resignation shall
take effect upon receipt thereof by the President or Secretary, unless
otherwise specified in the resignation. Except as otherwise provided
by law or by the Certificate of Incorporation, any or all of the
directors may be removed, with or without cause, by the holders of a
majority of the shares of stock outstanding and entitled to vote for
the election of directors.
SECTION 9. Vacancies. Unless otherwise provided in these
---------
By-laws, vacancies among the directors, whether caused by resignation,
death, disqualification, removal, an increase in the authorized number
of directors or otherwise, may be filled by the affirmative vote of a
majority of the remaining directors, although less than a quorum, or
by a sole remaining director, or, at a special meeting of the
shareholders, by the holders of shares entitled to vote for the
election of directors.
SECTION 10. Actions by Written Consent. Any action
--------------------------
required or permitted to be taken by the Board of Directors or by any
committee thereof may be taken without a meeting if all members of the
Board of Directors or of any such committee consent in writing to the
adoption of a resolution authorizing the action and the writing or
writings are filed with the minutes of the proceedings of the Board of
Directors or of any such committee.
SECTION 11. Electronic Communication. Any one or more
------------------------
members of the Board of Directors or any committee thereof may
participate in a meeting of the Board of Directors or any such
committee by means of a conference telephone or similar communications
equipment allowing all persons participating in the meeting to hear
each other at the same time. Participation by such means shall
constitute presence in person at a meeting.
ARTICLE III
Committees of the Board of Directors
-------------------------------------
SECTION 1. Appointment. From time to time the Board of
-----------
Directors by a resolution adopted by a majority of the whole Board may
appoint any committee or committees for any purpose or purposes, to
the extent lawful, which shall have powers as shall be determined and
specified by the Board of Directors in the resolution of appointment.
The Board of Directors shall have full power, at any time, to fill
vacancies in, to change
<PAGE>
membership of, to designate alternate members of, or to discharge any
such committee.
SECTION 2. Procedures, Quorum and Manner of Acting. Each
---------------------------------------
committee shall fix its own rules of procedure, and shall meet where
and as provided by such rules or by resolution of the Board of
Directors. Except as otherwise provided by law, the presence of a
majority of the then appointed members of a committee shall constitute
a quorum for the transaction of business by that committee, and in
every case where a quorum is present the affirmative vote of a
majority of the members of the committee present shall be the act of
the committee. Each committee shall keep minutes of its proceedings,
and actions taken by a committee shall be reported to the Board of
Directors.
SECTION 3. Action by Written Consent. Any action required
-------------------------
or permitted to be taken at any meeting of any committee of the Board
may be taken without a meeting if all the members of the committee
consent thereto in writing, and the writing or writings are filed with
the minutes of proceedings of the committee.
SECTION 4. Term; Termination. In the event any person
-----------------
shall cease to be a director of the Corporation, such person shall
simultaneously therewith cease to be a member of any committee
appointed by the Board of Directors.
ARTICLE IV
Officers
---------
SECTION 1. Election and Qualifications. The Board of
---------------------------
Directors shall elect the officers of the Corporation, which shall
include a President and a Secretary, and may include, by election or
appointment, one or more Vice-Presidents (any one or more of whom may
be given an additional designation of rank or function), a Treasurer
and such other officers as the Board may from time to time deem
proper. Each officer shall have such powers and duties as may be
prescribed by these By-laws and as may be assigned by the Board of
Directors or the President. Any two or more offices may be held by
the same person, except that no officer shall execute, acknowledge, or
verify any instrument in more than one capacity if such instrument is
required by law or by the By-laws to be executed, acknowledged, or
verified by two or more officers. When all of the issued and
outstanding stock of the Corporation is owned by one person, such
person may hold all or any combination of offices.
<PAGE>
SECTION 2. Term of Office and Remuneration. The term of
-------------------------------
office of all officers shall be one year and until their respective
successors have been elected and qualified, but any officer may be
removed from office, either with or without cause, at any time by the
Board of Directors. Any vacancy in any office arising from any cause
may be filled for the unexpired portion of the term by the Board of
Directors.
SECTION 3. Resignation; Removal. Any officer may resign at
--------------------
any time upon written notice to the Corporation and such resignation
shall take effect upon receipt thereof by the President or Secretary,
unless otherwise specified in the resignation. Any officer shall be
subject to removal, with or without cause, at any time by vote of a
majority of the whole Board.
SECTION 4. Chairman of the Board. The Chairman of the
---------------------
Board of Directors, if there be one, shall preside at all meetings of
the Board of Directors and shall have such other powers and duties as
may from time to time be assigned by the Board of Directors.
SECTION 5. President. The President shall be the Chief
---------
Executive Officer of the Corporation and shall have general management
and supervision of the property, business and affairs of the Corpora-
tion and over its other officers. The President shall preside at all
meetings of the shareholders and, in the absence or disability of the
Chairman of the Board of Directors, or if there be no Chairman, shall
preside at all meetings of the Board of Directors. The President may
execute and deliver in the name of the Corporation powers of attorney,
contracts, bonds and other obligations and instruments, except in
cases where the signing and execution thereof shall be expressly
delegated by the Board of Directors, or by these By-laws, to some
other officer or agent of the Corporation.
SECTION 6. Vice-President. A Vice-President may execute
--------------
and deliver in the name of the Corporation contracts and other
obligations and instruments pertaining to the regular course of such
Vice-President's duties, and shall have such other authority as from
time to time may be assigned by the Board of Directors or the
President.
SECTION 7. Treasurer. The Treasurer shall in general have
---------
all duties incident to the position of Treasurer and such other duties
as may be assigned by the Board of Directors or the President.
<PAGE>
SECTION 8. Secretary. The Secretary shall in general have
---------
all the duties incident to the office of Secretary and such other
duties as may be assigned by the Board of Directors or the President.
SECTION 9. Assistant Officers. Any assistant officer shall
------------------
have such powers and duties of the officer such assistant officer
assists as such officer or the Board of Directors shall from time to
time prescribe.
ARTICLE V
Books and Records
------------------
SECTION 1. Location. The Corporation shall keep correct
--------
and complete books and records of account and shall keep minutes of
the proceedings of the shareholders, of the Board of Directors, and/or
of any committee which the Board of Directors may appoint, and shall
keep at the office of the Corporation in the State of New Jersey or at
the office of the transfer agent or registrar, if any, in said state a
record containing the names and addresses of all shareholders, the
number and class of shares held by each, and the dates when such
shareholders respectively became the owners of record thereof. Any of
the foregoing books, minutes or records may be in written form or in
any other form capable of being converted into written form within a
reasonable time.
SECTION 2. Addresses of Shareholders. Notices of meetings
-------------------------
and all other corporate notices may be delivered personally or mailed
to each shareholder at said shareholder's address as it appears on the
records of the Corporation.
SECTION 3. Fixing Date for Determination of Shareholders of
------------------------------------------------
Record. For the purpose of determining the shareholders entitled to
------
notice of or to vote at any meeting of shareholders or any adjournment
thereof, or to express to consent to or dissent from any proposal
without a meeting, or for the purpose of determining shareholders
entitled to receive payment of any dividend or the allotment of any
rights, or for the purpose of any other action, the Board of Directors
may fix, in advance, a record date, in accordance with the provisions
of the Business Corporation Law. If no record date is fixed, the
record date for determining shareholders entitled to notice of or to
vote at a meeting of shareholders shall be at the close of business on
the day next preceding the day on which notice is given, or, if notice
is waived, at the close of business on the
<PAGE>
day next preceding the day on which the meeting is held. The record
date for determining shareholders for any purpose other than that
specified in the preceding sentence shall be at the close of business
on the day on which the Board of Directors adopts the resolution
relating thereto. A determination of shareholders of record entitled
to notice of or to vote at a meeting of shareholders shall apply to
any adjournment of the meeting; provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting.
ARTICLE VI
Certificates Representing Shares
---------------------------------
SECTION 1. Certificates; Signatures. (a) The shares of
------------------------
the Corporation shall be represented by certificates representing
shares, in such form as the Board of Directors may from time to time
prescribe, or shall be uncertificated shares. Certificates
representing shares shall have set forth thereon the statements
prescribed by law and shall be signed by the Chairman of the Board or
the President or a Vice-President and by the Secretary or an Assistant
Secretary or a Treasurer or an Assistant Treasurer and may be sealed
with the corporate seal or a facsimile thereof. Any and all
signatures on any such certificate may be facsimiles if the
certificate is countersigned by a transfer agent or registered by a
registrar other than the Corporation itself or its employee, or the
shares are listed on a registered national securities exchange. In
case any officer who has signed or whose facsimile signature has been
placed upon a certificate shall have ceased to be such officer before
such certificate is issued, it may be issued by the Corporation with
the same effect as if such officer were an officer at the date of its
issue.
(b) Each certificate representing shares issued by the
Corporation, if the Corporation is authorized to issue shares of more
than one class, shall set forth upon the face or back of the
certificate, or shall state that the Corporation will furnish to any
shareholder upon request and without charge, a full statement of the
designation, relative rights, preferences and limitations of the
shares of each class authorized to be issued and, if the Corporation
is authorized to issue any class of preferred shares in series, the
designation, relative rights, preferences and limitations of each such
series so far as the same have been fixed and the authority of the
Board of Directors to designate and fix the relative rights,
preferences and limitations of other series.
<PAGE>
(c) Each certificate representing shares shall state upon
the face thereof:
(1) That the Corporation is formed under the laws of the
State of New Jersey;
(2) The name of the person or persons to whom issued; and
(3) The number and class of shares, and the designation of
the series, if any, which such certificate represents.
(d) The name of the holder of record of the shares
represented thereby, with the number of shares and the date of issue,
shall be entered on the books of the Corporation.
SECTION 2. Transfer of Shares. Upon compliance with
------------------
provisions governing or restricting the transferability of shares, if
any, transfers of shares of the Corporation shall be made only on the
share record of the Corporation by the registered holder thereof, or
by such holder's attorney-in-fact thereunto authorized by power of
attorney duly executed and filed with the Secretary of the Corporation
or with a transfer agent or a registrar, if any, and upon the
surrender of the certificate or certificates for such shares properly
endorsed and the payment of all taxes due thereon, if any. A
certificate representing shares shall not be issued until the full
amount of consideration therefor has been paid, except as the Business
Corporation Law may otherwise permit.
SECTION 3. Fractional Shares. The Corporation may, but
-----------------
shall not be required to, issue certificates for fractions of a share
where necessary to effect transactions authorized by the Business
Corporation Law, which shall entitle the holder, in proportion to such
holder's fractional holdings, to exercise voting rights, receive divi-
dends and participate in liquidating distributions; or the Corporation
may pay in cash the fair value of fractions of a share as of the time
when those entitled to receive such fractions are determined; or it
may issue scrip in registered or bearer form over the manual or
facsimile signature of an officer of the Corporation or of its agent,
exchangeable as therein provided for full shares, but such scrip shall
not entitle the holder to any rights of a shareholder except as
therein provided. The Board of Directors shall have power and
authority to make all such rules and regulations as it may deem
expedient concerning the issue, transfer and registration of
certificates representing shares of the Corporation.
<PAGE>
SECTION 4. Lost, Stolen or Destroyed Certificates. The
--------------------------------------
Corporation may issue a new certificate of stock in place of any
certificate, theretofore issued by it, alleged to have been lost,
stolen or destroyed, and the Board of Directors may require the owner
of any lost, stolen or destroyed certificate, or his legal
representative, to give the Corporation a bond sufficient to indemnify
the Corporation against any claim that may be made against it on ac-
count of the alleged loss, theft or destruction of any such certi-
ficate or the issuance of any such new certificate.
ARTICLE VII
Dividends
----------
Subject always to the provisions of law and the Certificate
of Incorporation, the Board of Directors shall have full power to
determine whether any, and, if any, what part of any, funds legally
available for the payment of dividends shall be declared as dividends
and paid to shareholders; the division of the whole or any part of
such funds of the Corporation shall rest wholly within the lawful dis-
cretion of the Board of Directors, and it shall not be required at any
time, against such discretion, to divide or pay any part of such funds
among or to the shareholders as dividends or otherwise; and before
payment of any dividend, there may be set aside out of any funds of
the Corporation available for dividends such sum or sums as the Board
of Directors from time to time, in its absolute discretion, thinks
proper as a reserve or reserves to meet contingencies, or for equal-
izing dividends, or for repairing or maintaining any property of the
Corporation, or for such other purpose as the Board of Directors shall
think conducive to the interest of the Corporation, and the Board of
Directors may modify or abolish any such reserve in the manner in
which it was created.
ARTICLE VIII
Ratification
-------------
Any transaction, questioned in any law suit on the ground of
lack of authority, defective or irregular execution, adverse interest
of director, officer or shareholder, non-disclosure, miscomputation,
or the application of improper principles or practices of accounting,
may be ratified, before or after judgment, by the Board of Directors
or by the shareholders and if so ratified shall have the same force
and effect as if the
<PAGE>
questioned transaction had been originally duly authorized. Such
ratification shall be binding upon the Corporation and its
shareholders and shall constitute a bar to any claim or execution of
any judgment in respect of such questioned transaction.
ARTICLE IX
Corporate Seal
---------------
The corporate seal shall have inscribed thereon the name of
the Corporation and the year of its incorporation, and shall be in
such form and contain such other words and/or figures as the Board of
Directors shall determine. The corporate seal may be used by
printing, engraving, lithographing, stamping or otherwise making,
placing or affixing, or causing to be printed, engraved, lithographed,
stamped or otherwise made, placed or affixed, upon any paper or
document, by any process whatsoever, an impression, facsimile or other
reproduction of said corporate seal.
ARTICLE X
Fiscal Year
------------
The fiscal year of the Corporation shall be fixed, and shall
be subject to change, by the Board of Directors. Unless otherwise
fixed by the Board of Directors, the fiscal year of the Corporation
shall be the calendar year.
ARTICLE XI
Waiver of Notice
-----------------
Whenever notice is required to be given by these By-laws or
by the Certificate of Incorporation or by law, a written waiver
thereof, signed by the person or persons entitled to said notice,
whether before or after the time stated therein, shall be deemed
equivalent to notice.
<PAGE>
ARTICLE XII
Indemnification
----------------
SECTION 1. General Scope. The Corporation, to the fullest
-------------
extent permitted and in the manner required by the laws of the State
of New Jersey as in effect at the time of the adoption of this Article
XII or as the law may be amended from time to time, shall, except as
set forth in Article XII, Section 2 below, (i) indemnify any officer
or director of the Corporation, or any other person designated by the
Board of Directors as being entitled to indemnification (and the heirs
and legal representatives of such person) made, or threatened to be
made, a party in an action or proceeding (including, without limita-
tion, one by or in the right of the Corporation to procure a judgment
in its favor), whether civil or criminal, including an action by or in
the right of any other corporation of any type or kind, domestic or
foreign, or any partnership, joint venture, trust, employee benefit
plan or other enterprise, which any indemnified representative served
in any capacity at the request of the Corporation, by reason of the
fact that such indemnified person, or such indemnified person's
testator or intestate, was a director or officer of the Corporation or
served such other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise in any capacity, and (ii)
provide to any such indemnified person (and the heirs and legal
representatives of such person) advances for expenses incurred in
pursuing such action or proceeding, upon receipt of an undertaking by
or on behalf of such indemnified person to repay such amount as, and
to the extent, required by the Business Corporation Law.
SECTION 2. Limitations on Indemnification. The Corporation
------------------------------
shall not indemnify any indemnified representative: (a) where such
indemnification is expressly prohibited by applicable law; (b) where
the conduct of the indemnified representative has been finally
determined (i) to constitute willful misconduct or recklessness or
(ii) to be based upon or attributable to the receipt by the
indemnified representative of a personal benefit from the Corporation
to which the indemnified representative is not legally entitled; or
(c) to the extent such indemnification has been determined to be
otherwise unlawful.
SECTION 3. Indemnification Not Exclusive. The rights
-----------------------------
granted by this Article shall not be deemed exclusive of any other
rights to which those seeking indemnification may be entitled under
any statute, agreement, vote of shareholders or disinterested
directors or otherwise. The indemnification
<PAGE>
provided by or granted pursuant to this Article shall continue as to a
person who has ceased to be an indemnified representative in respect
of matters arising prior to such time, and shall inure to the benefit
of the heirs, executors, administrators and personal representatives
of such a person.
SECTION 4. Contract Rights; Amendment or Repeal. All
------------------------------------
rights under this Article shall be deemed a contract between the
Corporation and the indemnified representative pursuant to which the
Corporation and each indemnified representative intend to be legally
bound. Any repeal, amendment or modification hereof shall be
prospective only and shall not affect any rights or obligations then
existing.
ARTICLE XIII
Bank Accounts, Drafts, Contracts, Etc.
---------------------------------------
SECTION 1. Bank Accounts and Drafts. In addition to such
------------------------
bank accounts as may be authorized by the Board of Directors, the
Treasurer or any person designated by the Treasurer, whether or not an
employee of the Corporation, may authorize such bank accounts to be
opened or maintained in the name and on behalf of the Corporation as
such person may deem necessary or appropriate, and may authorize pay-
ments from such bank accounts to be made upon and according to the
check of the Corporation in accordance with the written instructions
of the Treasurer, or other person so designated by the Treasurer.
SECTION 2. Contracts. The Board of Directors may authorize
---------
any person or persons, in the name and on behalf of the Corporation,
to enter into or execute and deliver any and all deeds, bonds,
mortgages, contracts and other obligations or instruments, and such
authority may be general or confined to specific instances.
SECTION 3. Proxies; Powers of Attorney; Other Instruments.
----------------------------------------------
The Chairman, the President or any other person designated by either
of them shall have the power and authority to execute and deliver
proxies, powers of attorney and other instruments on behalf of the
Corporation in connection with the rights and powers incident to the
ownership of stock by the Corporation. The Chairman, the President or
any other person authorized by proxy or power of attorney executed and
delivered by either of them on behalf of the Corporation may attend
and vote at any meeting of shareholders of any company in which the
Corporation may hold stock, and may exercise on behalf of the
<PAGE>
Corporation any and all of the rights and powers incident to the
ownership of such stock at any such meeting, or otherwise as specified
in the proxy or power of attorney so authorizing any such person. The
Board of Directors, from time to time, may confer like powers upon any
other person.
SECTION 4. Financial Reports. The directors may appoint
-----------------
the Treasurer or other fiscal officer and/or the Secretary or any
other officer to cause to be prepared and furnished to shareholders
entitled thereto any special financial notice and/or financial
statement, as the case may be, which may be required by any provision
of law.
ARTICLE XIV
Amendments
-----------
The shareholders entitled to vote in the election of
directors may amend or repeal the By-laws and may adopt new By-laws.
Except as otherwise required by law or by the provisions of these
By-laws, the Board of Directors may also amend or repeal the By-laws
and adopt new By-laws, but By-laws adopted by the Board of Directors
may be amended or repealed by the said shareholders. Any change in
the By-laws shall take effect when adopted unless otherwise provided
for in the resolution effecting the change.
NYFS06...:\47\41847\0008\1710\BYLD126S.110
Exhibit 3.2(f)(i)
<PAGE>
BYLAWS
OF
NEW MEXICO CHECK MART, INC.
ARTICLE I. - OFFICES
---------------------
Section 1.1. Registered Office and Agent. The Corporation
------------ ---------------------------
shall maintain a registered office and a registered agent in New
Mexico at all times. The initial registered office and registered
agent of the Corporation are set forth in the Articles of Incorpo-
ration. They may be changed, from time to time, as provided in the
New Mexico Business Corporation Act ("Act"). The address of the
registered agent shall be the same as the address of the Corporation's
registered office. The Corporation may also have other offices as the
Board of Directors may from time to time establish.
ARTICLE II. - SHAREHOLDERS
---------------------------
Section 2.1. Annual Meeting. There shall be an annual
------------ --------------
meeting of the shareholders, held on or about June 1 of each year,
unless such date is a legal holiday, in which event it shall be held
on the next day which is not a legal holiday. If such annual meeting
is not held on such date, it shall be held as soon thereafter as may
be convenient, and any business transacted or elections held at such
delayed meeting shall be as valid as if the meeting had been held on
the date provided herein. The annual meeting shall be held at the
place, within or outside of the State of New Mexico, specified in the
notice of the meeting.
Section 2.2. Special Meetings. Special Meetings of the
------------ ----------------
shareholders may be called, for any purpose, and at any time, by the
President, the Board of Directors, or by the then holder or holders of
not less than one-tenth (1/10) of all the shares of the Corporation
entitled to vote at the meeting. A special meeting of the
shareholders shall be held at the place, within or outside of the
State of New Mexico, specified in the notice of the meeting.
Section 2.3. Notice of Meetings. Written notice stating
------------ ------------------
the place, day and hour of the meeting and, in case of a special meet-
ing, the purpose or purposes for which the meeting is called, shall be
delivered not less than ten (10) nor more than fifty (50) days before
the date of the meeting, either personally or by mail, at the
direction of the President, the Secretary or
<PAGE>
the officer or persons calling the meeting, to each shareholder of
record entitled to vote at the meeting. The Secretary shall deliver
the notice of meetings to the shareholders. If the Secretary refuses
to deliver the notice, the notice shall be delivered by the person
calling the meeting.
Section 2.4. Closing of Transfer Books or Fixing of Record
------------ ---------------------------------------------
Date. For the purpose of determining shareholders entitled to notice
----
of or to vote at any meeting of shareholders or any adjournment
thereof, or entitled to receive payment of any dividend, or in order
to make a determination of shareholders for any other proper purpose,
the Board of Directors may provide that the stock transfer books shall
be closed for a stated period not to exceed fifty (50) days. If the
stock transfer books are closed for the purpose of determining
shareholders entitled to notice of or to vote at a meeting of
shareholders, the books shall be closed for at least ten (10) days
immediately preceding the meeting. In lieu of closing the stock
transfer books, the Board of Directors may fix in advance a date as
the record date for any such determination of shareholders, the date
to be not more than fifty (50) days, and in case of a meeting of
shareholders, not less than ten (10) days, prior to the date on which
the particular action requiring such determination of shareholders is
to be taken. If the stock transfer books are not closed and no record
date is fixed for the determination of shareholders entitled to notice
of or to vote at a meeting of shareholders, or shareholders entitled
to receive payment of a dividend, the date on which the notice of the
meeting is mailed or the date on which the resolution of the Board of
Directors declaring the dividend is adopted, as the case may be, shall
be the record date for the determination of shareholders. When a
determination of shareholders entitled to vote at any meeting of the
shareholders has been made as provided in this section, the
determination shall apply to any adjournment thereof.
Section 2.5. Voting List. The officer or agent having
------------ -----------
charge of the stock transfer books for shares of the Corporation shall
make, at least ten (10) days before each meeting of shareholders, a
complete list of the shareholders entitled to vote at the meeting or
any adjournment thereof, arranged in alphabetical order, with the
address of and the number of shares held by each, which list, for a
period of ten (10) days prior to the meeting, shall be kept on file at
the registered office of the Corporation and shall be subject to
inspection by any shareholder at any time during usual business hours.
The list shall also be produced and kept open at the time and place of
meeting and shall be subject to the inspection of any shareholder
during the whole time of the meeting. The original stock transfer
books shall be prima facie
<PAGE>
evidence as to who are the shareholders entitled to examine the lists
or transfer books or vote at any meeting of shareholders. Failure to
comply with the requirements of this section does not affect the
validity of any action taken at the meeting. An officer or agent
having charge of the stock transfer books who fails to prepare the
list of shareholders, or keep it on file for a period of ten (10)
days, or produce and keep it open for inspection at the meeting, as
provided in this section, is liable to any shareholder suffering
damage on account of the failure to the extent of the damage.
Section 2.6. Quorum. The holders of a majority of the
------------ ------
shares of the Corporation entitled to vote, represented in person or
by proxy, shall constitute a quorum at all meetings of the
shareholders. A quorum once attained at a meeting shall be deemed to
continue until adjournment, notwithstanding the voluntary withdrawal
of enough shares to leave less than a quorum. If a quorum is not
present at any meeting, the shareholders present may adjourn the
meeting, from time to time, without notice other than announcement at
the meeting, and may reconvene when a quorum shall be present and
proceed as if there had been no adjournment.
Section 2.7. Majority Rule. When a quorum is present at
------------ -------------
any meeting, the affirmative vote of the majority of the shares repre-
sented at the meeting and entitled to vote on the subject matter shall
be the act of all the shareholders, unless the vote of a greater
number is required by the Act, the Articles of Incorporation, or these
Bylaws.
Section 2.8. Meeting Not Required. Any action which is re
------------ --------------------
quired or permitted to be taken at a meeting of the shareholders may
be taken without a meeting if a consent in writing, setting forth the
action so taken, is signed by all of the shareholders who are entitled
to vote with respect to the subject matter thereof. Such consent
shall have the same effect as a unanimous vote of the shareholders.
Such action shall be effective as of the date specified in the
consent.
Section 2.9. Voting of Shares. Each outstanding share
------------ ----------------
shall be entitled to one (1) vote on each matter submitted to a vote
at any meeting of the shareholders. The right of any shareholder to
accumulate his votes at an election of the Board of Directors is
expressly prohibited.
Section 2.10. Proxies. At all meetings of shareholders, a
------------- -------
shareholder may vote by proxy, which proxy must be written, dated and
executed by the shareholder or by his duly
<PAGE>
authorized attorney-in-fact. Proxies shall be filed with the
Secretary or a duly appointed committee before or at the time of the
meeting. No proxy shall be valid after eleven (11) months from the
date of its execution, unless otherwise specifically provided in the
proxy. Any shareholder giving a proxy has the power to revoke it by
giving notice to the Corporation in writing or in open meeting before
any vote is taken.
ARTICLE III. - DIRECTORS
-------------------------
Section 3.1. Corporate Management. All corporate powers
------------ --------------------
shall be exercised by or under authority of, and the Corporation shall
be managed under the direction of, its Board of Directors, who may do
all lawful acts and things which are not prohibited by law or by the
Articles of Incorporation or these Bylaws, and which are not directed
or required to be done by the shareholders.
Section 3.2. Number, Qualifications and Election. The
------------ -----------------------------------
Board of Directors shall consist of two natural persons. The
Directors need not be shareholders or New Mexico residents. Directors,
other than those on the initial Board of Directors designated in the
Articles of Incorporation and those elected to fill vacancies, shall
be elected at the annual meeting of the shareholders. Each Director
shall, unless sooner removed from office, serve until the next
succeeding annual meeting and until his successor shall have been
elected and qualified.
Section 3.3. Removal. A Director may be removed from
------------ -------
office, with or without cause, at any shareholders' meeting called
expressly for that purpose, at which a quorum exists, by an
affirmative vote of the holders of a majority of the outstanding
shares present (in person or by proxy) and entitled to vote at such
meeting.
Section 3.4. Vacancies. Any vacancies occurring in the
------------ ---------
Board of Directors by reason of an increase in the number of Directors
or otherwise may be filled by a majority of the remaining Directors,
even though less than a quorum. A Director elected to fill a vacancy
in the existing Board of Directors shall hold office for the unexpired
portion of the term of his predecessor and until his successor is
elected and qualified. A directorship to be filled by reason of an
increase in the number of Directors may be filled by the Board of
Directors for the term of office continuing only until the next
election of Directors by the shareholders.
<PAGE>
Section 3.5. Place of Meetings. Directors' meetings may be
------------ -----------------
held at any place within or outside of the State of New Mexico.
Section 3.6. Regular Directors' Meetings. The Board of
------------ ---------------------------
Directors, from time to time, may determine a date, time and place for
regular meetings and no further notice need be given for any regular
meeting.
Section 3.7. Special Directors' Meetings. The President
------------ ---------------------------
may call a special meeting of the Board of Directors at any time.
Likewise, one or more Directors shall be entitled to have a special
meeting called, by requesting the President or the Secretary to call
such meeting. Notice of the time and place thereof shall be given to
each Director at least three (3) days before the meeting if by mail,
or at least twenty-four (24) hours if by person or by telephone or
telegraph. The notice of any such meeting shall specify the purpose
or purposes of such meeting. The Secretary shall deliver the notice
of meetings to the Directors. If the Secretary does not give the
notice, the notice shall be delivered by the person or persons calling
the meeting.
Section 3.8. Directors' Quorum. A majority of the
------------ -----------------
Directors shall constitute a quorum for the transaction of business.
A quorum, once attained at a meeting, shall be deemed to continue
until adjournment, notwithstanding the voluntary withdrawal of enough
Directors to leave less than a quorum. The act of the majority of the
Directors present at a meeting at which a quorum is present shall be
the act of the Board of Directors.
Section 3.9. Presumption of Assent. A Director who is
------------ ---------------------
present at a meeting of the Board of Directors at which action on any
corporate matter is taken shall be presumed to have assented to the
action taken unless his dissent shall be entered in the minutes of the
meeting or unless he shall file his written dissent to such action
with the person acting as the secretary of the meeting before the
adjournment thereof or shall forward such dissent by registered mail
to the secretary of the Corporation immediately after the adjournment
of the meeting. Such right to dissent shall not apply to a Director
who voted in favor of such action.
Section 3.10. Executive Committees or Other Committees.
------------- ----------------------------------------
The Board of Directors may, by resolution passed by the Board,
designate one or more Executive Committees or other Committees, each
committee to consist of two or more of the
<PAGE>
Directors, which shall have such powers as may be provided in the
resolution, provided such powers are not denied them by the Act.
Executive Committees and other Committees shall report to the Board of
Directors when required.
Section 3.11. Meetings by Telephone. Members of the Board
------------- ---------------------
of Directors, or a committee of Directors, may participate in a
meeting of the Board, or committee, by means of a conference telephone
or similar communications equipment by means of which all persons
participating in the meeting can hear each other at the same time.
Participation by such means shall constitute presence in person at a
meeting.
Section 3.12. Consent in Writing. Any action which is re
------------- ------------------
quired or permitted to be taken at a meeting of the Directors, or a
committee, may be taken without a meeting if a consent in writing,
setting forth the action so taken, is signed by all of the Directors,
or members of the Committee. The consent shall have the same effect
as a unanimous vote. Such action shall be effective as of the date
specified in the consent.
Section 3.13. Salary of Directors. Directors shall not
------------- -------------------
receive any salary for their services as Directors but they may serve
the Corporation in another capacity and receive compensation therefor.
In addition, the Board may authorize the payment of Directors'
honoraria or fees, and expenses for attendance at any meeting.
ARTICLE IV. - NOTICES
----------------------
Section 4.1. Notice Construed. Whenever any law, the Arti
------------ ----------------
cles of Incorporation, or these Bylaws requires a notice to be given
to any Director or shareholder and no provision is made as to how such
notice shall be given, it shall not be construed to mean personal
notice, but such notice may be given by mail addressed to such
Director or shareholder at his address as it appears in the records of
the Corporation. In addition, any such notice may be given to a
Director by telegram to his address, by telephone, or by speaking
directly with such Director. Any notice given by mail shall be deemed
to be given at the time the same is deposited in the United States
mail, postage prepaid.
Section 4.2. Waiver of Notice. A written Waiver of Notice,
------------ ----------------
signed by the person or persons entitled to receive notice, whether
before or after the time stated in such notice, shall be deemed
equivalent to the giving of such notice. Attendance at any meeting
shall constitute a Waiver of Notice of such meeting, except where such
person or persons attend a
<PAGE>
meeting for the express purpose of objecting to the transaction of any
business on the ground that the meeting is not lawfully called or
convened.
ARTICLE V. - OFFICERS
----------------------
Section 5.1. Enumeration of Officers. The officers of the
------------ -----------------------
Corporation shall be a President, one or more Vice presidents, a
Secretary and a Treasurer. Any two or more offices may be held by the
same person, except that the offices of president and Secretary shall
not be held by the same person. The Board of Directors may also elect
one or more Assistant Secretaries and one or more Assistant
Treasurers.
Section 5.2. Election and Term of Office. The Board of
------------ ---------------------------
Directors shall elect the officers of the Corporation, and determine
their term of office and compensation.
Section 5.3. Removal and Vacancies. Any officer may be
------------ ---------------------
removed upon the affirmative vote of a majority of the Board of
Directors, whenever in its judgment the best interests of the
Corporation will be served thereby. Such removal shall be without
prejudice to the contract rights, and obligations, if any, of the
person removed. However, election or appointment of an officer shall
not itself create contract rights. Any vacancy caused by removal or
otherwise may be filled by the Board at any time.
Section 5.4. President. The President shall be the chief
------------ ---------
executive officer of the Corporation. He shall preside at meetings of
the shareholders and the meetings of the Board of Directors, shall
have general and active management of the business and affairs of the
Corporation, shall see that all orders and resolutions of the Board of
Directors are carried into effect, and shall perform other duties as
the Board of Directors shall prescribe.
Section 5.5. Vice Presidents. The Vice Presidents shall
------------ ---------------
have such powers and perform such duties as the Board of Directors may
from time to time prescribe or as the President may from time to time
delegate to them.
Section 5.6. Secretary. The Secretary shall attend all
------------ ---------
meetings of the Board of Directors and the shareholders and record in
the Minutes all votes of all proceedings, shall maintain the stock
transfer books of the Corporation and shall act as Transfer Agent for
the Corporation, and shall perform such other duties as may be
prescribed by the Board of Directors or
<PAGE>
the President. If the Corporation shall have a seal, he shall be
custodian thereof, and when authorized by the Board, shall affix the
same to any instrument requiring it.
Section 5.7. Assistant Secretaries. The Assistant Secre
------------ ---------------------
taries shall have such powers and perform such duties as the Board of
Directors, the President or the Secretary may from time to time
prescribe or delegate to them.
Section 5.8. Treasurer. The Treasurer shall have charge
------------ ---------
and custody of and be responsible for all funds and securities of the
Corporation, receive and give receipts for moneys due and payable to
the Corporation from any source whatsoever, deposit all such moneys in
the name of the Corporation in such banks, trust companies or other
depositories as shall be selected, and in general perform all of the
duties incident to the office of Treasurer and such other duties as
from time to time may be assigned to him by the President or by the
Board of Directors.
Section 5.9. Assistant Treasurers. The Assistant
------------ --------------------
Treasurers shall have such powers and perform such duties as the Board
of Directors, the President or the Treasurer may from time to time
prescribe or delegate to them.
ARTICLE VI. - STOCK
--------------------
Section 6.1. Form of Certificates. Stock certificates
------------ --------------------
shall be in such form as may be determined by the Board of Directors.
Such certificates shall be consecutively numbered and shall be entered
in the books of the Corporation as they are issued. Each certificate
shall state upon its face that the Corporation is organized under the
laws of the State of New Mexico, the name of the person to whom it is
issued, and the number and class of shares which the certificate
represents. Certificates shall be signed by the President or by a
Vice President and by the Secretary or an Assistant Secretary, which
signatures may be facsimiles.
Section 6.2. Lost Certificates. The Board of Directors may
------------ -----------------
direct a new certificate representing shares to be issued in place of
any certificate theretofore issued by the Corporation alleged to have
been lost or destroyed upon the making of an affidavit of that fact by
the person claiming the certificate to have been lost or destroyed.
When authorizing such issue, the Board of Directors, in its
discretion, may as a condition precedent require the owner of such
lost or destroyed certificate to give the Corporation a bond in such
form, in such
<PAGE>
amount and with such surety or sureties as it may direct as indemnity
against any claim that may be made against the Corporation with
respect to the certificate alleged to have been lost or destroyed.
Section 6.3. Transferability. Shares of stock shall be
------------ ---------------
transferable only on the books of the Corporation by the holder
thereof in person or by his duly authorized agent.
Section 6.4. Transfer of Stock. In the event there are two
------------ -----------------
or more shareholders and a shareholder in the Corporation shall
terminate his contractual relationship with the Corporation on account
of death, disability, retirement or for any reason whatsoever, such
shareholder or the transferee of his shares of stock shall transfer
his shares according to the terms of a written stock purchase
agreement or other written agreement, if any, for the acquisition of
the Corporation's stock as the Corporation and the shareholders shall
enter into. Such agreement, if one is executed, is incorporated
herein by reference.
Section 6.5. Holder of Record. The Corporation shall be
------------ ----------------
entitled to treat the holder of record of any share or shares of stock
as the holder in fact thereof and, accordingly, shall not be bound to
recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it shall have
express or other notice thereof.
Section 6.6. Corporation May Purchase Own Capital Stock.
------------ ------------------------------------------
This Corporation shall have the right to purchase its own capital
stock and to hold the same, subject, however, to the limitations
imposed upon such purchases by the Act.
Section 6.7. Corporation's Lien Upon Its Stock. This
------------ ---------------------------------
Corporation shall have a prior lien upon its stock in the hands of any
holder to secure the Corporation in any sum that may be owing to it by
the holder and no transfer shall be made until such sums so owing are
either paid or satisfactorily secured in such manner as the Board of
Directors may require.
Section 6.8. Dividends. Dividends upon the outstanding
------------ ---------
shares of the Corporation, subject to the provisions of the Articles
of Incorporation, may be declared by the Board of Directors at any
regular or special meeting. Dividends may be paid in cash, property
or in shares of the Corporation.
<PAGE>
ARTICLE VII. - VOTING OF SHARES BY CERTAIN HOLDERS
---------------------------------------------------
Section 7.1. Another Corporation. Shares held by another
------------ -------------------
corporation, domestic or foreign, if a majority of the shares entitled
to vote for the election of directors of the other corporation is held
by the Corporation, shall not be voted at any meeting or counted in
determining the total number of outstanding shares at any given time.
Shares standing in the name of another corporation, domestic or
foreign, may be voted by the officer, agent or proxy as the Bylaws of
the other corporation may prescribe, or, in the absence of such
provisions, as the Board of Directors of the other corporation may
determine.
Section 7.2. Personal Representative, or Trustee. Shares
------------ -----------------------------------
held by a personal representative, guardian or conservator may be
voted by him, either in person or by proxy, without a transfer of the
share into his name. Shares standing in the name of a trustee, or a
custodian for a minor, may be voted by the trustee or custodian,
either in person or by proxy, but only after a transfer of the shares
into the name of the trustee or custodian.
Section 7.3. Receiver or Bankruptcy Trustee. Shares
------------ ------------------------------
standing in the name of a receiver or bankruptcy trustee may be voted
by the receiver or bankruptcy trustee, and shares held by or under the
control of a receiver or bankruptcy trustee may be voted by him
without the transfer thereof into his name if authority to do so is
contained in an appropriate order of the Court by which the receiver
or bankruptcy trustee was appointed.
Section 7.4. Pledgee. A shareholder whose shares are
------------ -------
pledged may vote the shares until the shares have been transferred
into the name of the pledgee, and thereafter the pledgee may vote the
shares so transferred.
Section 7.5. Partnership. Shares standing in the name of a
------------ -----------
partnership may be voted by any partner, and shares standing in the
name of a limited partnership may be voted by any general partner.
Section 7.6. Life Tenant. Shares standing in the name of a
------------ -----------
person as life tenant may be voted by him, either in person or by
proxy.
Section 7.7. Joint Tenants. Shares standing in the name of
------------ -------------
joint tenants may be voted by any tenant, either in person or by
proxy.
<PAGE>
Section 7.8. Redemption. From the date on which written
------------ ----------
notice of redemption of redeemable shares has been mailed to the
holders thereof and a sum sufficient to redeem the shares has been
deposited with a bank or trust company with irrevocable instruction
and authority to pay the redemption price to the holders thereof upon
surrender of certificates therefor, the shares shall not be entitled
to vote on any matter and shall not be deemed to be outstanding
shares.
ARTICLE VIII. - CHAIRMAN OF THE BOARD OF DIRECTORS
---------------------------------------------------
The Board of Directors shall have the right and power to
elect a chairman from among the members of the Board of Directors. If
a chairman of the Board of Directors is elected, the chairman shall
preside at all meetings of the Board of Directors in place of the
President of the Corporation, and the chairman may also cast a vote on
all questions.
ARTICLE IX. - CONTRACTS, LOANS, CHECKS AND DEPOSITS
----------------------------------------------------
Section 9.1. Contracts. The Board of Directors may
------------ ---------
authorize any officer or officers, agent or agents, to enter into any
contract or execute and deliver any instrument in the name of and on
behalf of the Corporation, and such authority may be general or
confined to specific instances.
Section 9.2. Loans. No loans shall be contracted on behalf
------------ -----
of the Corporation and no evidences of indebtedness shall be issued in
its name unless authorized by a resolution of the Board of Directors.
Such authority may be general or confined to specific instances.
Section 9.3. Checks, Drafts, Etc. All checks, drafts or
------------ -------------------
other orders for the payment of money, notes or other evidence of
indebtedness issued in the name of the Corporation, shall be signed by
such officer or officers, agent or agents, of the Corporation and in
such manner as shall be determined from time to time by resolution of
the Board of Directors.
Section 9.4. Deposits. All funds of the Corporation not
------------ --------
otherwise employed shall be deposited from time to time to the credit
of the Corporation in such banks, trust companies or other
depositories as the Board of Directors may select.
ARTICLE X. - COMPENSATION
--------------------------
By resolution of the Board of Directors, the Directors may
be paid their expenses, if any, of attendance at each meeting
<PAGE>
of the Board of Directors, and may be paid a fixed sum for attendance
at each meeting of the Board of Directors or a stated salary as
Director; provided, that nothing herein contained shall be construed
to preclude any director from serving the Corporation in any other
capacity and receiving compensation therefor.
ARTICLE XI. - CONTRACTS WITH INSIDERS
--------------------------------------
A director or officer of the Corporation shall not be dis-
qualified by his office from dealing or contracting with the
Corporation either as a vendor, purchaser, or otherwise; nor shall any
transaction or contract of the Corporation be void or voidable by
reason of the fact that any director or officer, or any firm of which
any director or officer is a member, or any corporation of which any
director or officer is a shareholder, officer or director is in any
way interested in such transaction or contract, provided that such
transaction or contract is or shall be authorized, ratified, or
approved either (1) by a vote of a majority of a quorum of the Board
of Directors, or (2) by the written consent or by the vote at any
shareholders' meeting of the holders of record of a majority of all of
the outstanding shares of the Corporation entitled to vote; nor shall
any director or officer be liable to account to the Corporation for
any profits realized by or from or through any such transaction or
contract authorized, ratified or approved as herein provided by reason
of the fact that he, or any firm of which he is a member, or any
corporation of which he is a stockholder, officer or director was
interested in such transaction or contract. Nothing herein contained
shall create liability in the event above described, or prevent the
authorization or approval of such contracts in any other manner
permitted by law.
ARTICLE XII. - AMENDMENTS
--------------------------
These Bylaws may be altered, amended or repealed at any
meeting of the Directors at which a quorum is present by an
affirmative vote of the majority of Directors present at such meeting
and entitled to vote.
ARTICLE XIII. - INDEMNIFICATION
--------------------------------
The Corporation shall indemnify its past, present, and
future directors and officers (and their executors, administrators, or
other legal representatives) against all reasonable expense incurred
by them in defending claims made or suits or proceedings brought
against them as directors or officers and against all liability
resulting from such claims,
<PAGE>
suits or proceedings except in relation to matters as to which any
such officer or director shall be adjudged in such action, suit or
proceeding to be liable for gross negligence or willful misconduct in
the performance of his duties. Such indemnification shall include,
without limitation, the payment of judgments against such directors
and officers, and the reimbursement of amounts paid in settlement of
claims, suits or proceedings (including judgments in favor of the
Corporation or amounts paid in settlement to the Corporation); such
indemnification shall also include, without limitation, the payment of
counsel fees and expenses of officers and directors in suits against
them which are successfully defended by such officers and directors,
which are unsuccessfully defended if the claim or action does not
arise from the gross negligence or willful misconduct of such officers
or directors. Such right of indemnification shall be in addition to
any indemnification expressly recognized as within corporate powers
pursuant to any provision of the Act now in force or as it may be
subsequently amended or to which such officer or director may be
entitled under any other provision of law, agreement, vote of
stockholders, or otherwise; and such right shall extend and apply to
the estates of deceased directors or officers.
<PAGE>
ADOPTION OF BYLAWS
-------------------
The foregoing Bylaws are hereby adopted by the Corporation.
DATE: May 8, 1985
--------------------
NYFS06...:\47\41847\0008\1710\ARTD126L.060
Exhibit 3.2(g)(i)
<PAGE>
BY-LAWS
OF
CHECK MART OF PENNSYLVANIA, INC.
(a Pennsylvania corporation)
-----------
ARTICLE I
Shareholders
------------
SECTION 1. Annual Meeting. The annual meeting of share
--------------
holders for the election of directors and for the transaction of such
other business as may properly come before the meeting shall be held
at the office of the Corporation in the Commonwealth of Pennsylvania
or at such other place within or without the Commonwealth of
Pennsylvania as may be determined by the Board of Directors and as
shall be designated in the notice of said meeting, on such date and at
such time as may be determined by the Board of Directors.
SECTION 2. Special Meetings. Special meetings of the
----------------
shareholders for the transaction of such business as may properly come
before the meeting shall be held at the office of the Corporation in
the Commonwealth of Pennsylvania, or at such other place within or
without the Commonwealth of Pennsylvania as may be designated from
time to time by the Board of Directors. Whenever the Board of
Directors shall fail to fix such place, or whenever shareholders en-
titled to call a special meeting shall call the same, the meeting
shall be held at the office of the Corporation in the Commonwealth of
Pennsylvania. Special meetings of the shareholders shall be held upon
call of the Board of Directors or of the President or any
Vice-President or the Secretary or any director, at such time as may
be fixed by the Board of Directors or the President or such
Vice-President or the Secretary or such director, as the case may be,
and as shall be stated in the notice of said meeting, except when the
Business Corporation Law of 1988 of the Commonwealth of Pennsylvania
(the "Business Corporation Law") confers upon the shareholders the
right to demand the call of such meeting and fix the date thereof.
SECTION 3. Notice of Meetings. The notice of all meetings
------------------
of shareholders shall be in writing, shall state the place, date and
hour of the meeting and, unless it is the annual
<PAGE>
meeting of shareholders, shall indicate that it is being issued by or
at the direction of the person or persons calling the meeting. The
notice of an annual meeting shall state that the meeting is called for
the election of directors and for the transaction of such other
business as may properly come before the meeting and shall state the
purpose or purposes of the meeting if any other action is to be taken
at such annual meeting which could be taken at a special meeting. The
notice of a special meeting shall, in all instances, state the purpose
or purposes for which the meeting is called. A copy of the notice of
any meeting shall be served either personally or by first class mail,
in accordance with the provisions of the Business Corporation Law, to
each shareholder at such shareholder's record address or at such other
address as such shareholder may have furnished by request in writing
to the Secretary of the Corporation. If a meeting is adjourned to
another time or place and if any announcement of the adjourned time or
place is made at the meeting, it shall not be necessary to give notice
of the adjourned meeting unless the Board of Directors, after
adjournment, fixes a new record date for the adjourned meeting.
Notice of a meeting need not be given to any shareholder who submits a
signed waiver of notice before or after the meeting. The attendance
of a shareholder at a meeting without protesting prior to the con-
clusion of the meeting the lack of notice of such meeting shall
constitute a waiver of notice by such shareholder.
SECTION 4. Shareholder Lists. A list of shareholders as of
-----------------
the record date, certified by the corporate officer responsible for
its preparation, or by the transfer agent, if any, shall be produced
at any meeting of shareholders upon the request thereat or prior
thereto of any shareholder. If the right to vote at any meeting is
challenged, the inspectors of election, if any, or the person
presiding thereat, shall require such list of shareholders to be
produced as evidence of the right of the persons challenged to vote at
such meeting, and all persons who appear from such list to be
shareholders entitled to vote thereat may vote at such meeting.
SECTION 5. Quorum. Except as otherwise provided by law or
------
the Corporation's Articles of Incorporation, a quorum for the
transaction of business at any meeting of shareholders shall consist
of the holders of record of a majority of the issued and outstanding
shares of the capital stock of the Corporation entitled to vote at the
meeting, present in person or by proxy. At all meetings of the
shareholders at which a quorum is present, all matters, except as
otherwise provided by law, in the Articles of Incorporation or in
Section 7, shall be decided by the vote of the holders of a majority
of the shares entitled to vote thereat,
<PAGE>
that are present in person or by proxy. If there be no such quorum,
the holders of a majority of such shares so present or represented may
adjourn the meeting from time to time, without further notice, until a
quorum shall have been obtained. When a quorum is once present to
organize a meeting, it is not broken by the subsequent withdrawal of
any shareholder.
SECTION 6. Organization. Meetings of shareholders shall be
------------
presided over by the Chairman, if any, or if none or in the Chairman's
absence the President, or if none or in the President's absence a
Vice-President, or, if none of the foregoing is present, by a chairman
to be chosen by the shareholders entitled to vote who are present in
person or by proxy at the meeting. The Secretary of the Corporation,
or in the Secretary's absence an Assistant Secretary, shall act as
secretary of every meeting, but if neither the Secretary nor an
Assistant Secretary is present, the presiding officer of the meeting
shall choose any person present to act as secretary of the meeting.
SECTION 7. Voting; Proxies; Required Vote; Ballots. At
---------------------------------------
each meeting of shareholders, every shareholder shall be entitled to
vote in person or by proxy appointed by instrument in writing,
subscribed by such shareholder or by such shareholder's duly
authorized attorney-in-fact, and shall have one vote for each share
entitled to vote and registered in such shareholder's name on the
books of the Corporation on the applicable record date fixed pursuant
to these By-laws. No proxy shall be valid after the expiration of 11
months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the shareholder
executing it, except as otherwise provided by the Business Corporation
Law. At all elections of directors the voting may but need not be by
ballot and a plurality of the votes cast thereat shall elect. Except
as otherwise required by law or the Articles of Incorporation, any
other action shall be authorized by a majority of the votes cast.
SECTION 8. Inspectors. The Board of Directors, in advance
----------
of any meeting, may appoint one or more inspectors to act at the
meeting or any adjournment thereof. If an inspector or inspectors are
not so appointed, the person presiding at the meeting may, and on the
request of any shareholder shall, appoint one or more inspectors. In
case any person appointed fails to appear or act, the vacancy may be
filled by appointment made by the Board of Directors in advance of the
meeting or at the meeting by the person presiding thereat. Each
inspector, if any, before entering upon the discharge of such
inspector's duties, shall take and sign an oath to execute faithfully
the duties of
<PAGE>
inspector at such meeting with strict impartiality and according to
the best of such inspector's ability. The inspectors, if any, shall
determine the number of shares outstanding and the voting power of
each, the shares represented at the meeting, the existence of a
quorum, and the validity and effect of proxies, and shall receive
votes, ballots or consents, hear and determine all challenges and
questions arising in connection with the right to vote, count and
tabulate all votes, ballots or consents, determine the result, and do
such acts as are proper to conduct the election or vote with fairness
to all shareholders. On request of the person presiding at the
meeting or any shareholder, the inspectors shall make a report in
writing of any challenge, question or matter determined by them and
execute a certificate as to any fact found by them.
SECTION 9. Actions Without Meetings. Whenever shareholders
------------------------
are required or permitted to take any action by vote, such action may
be taken without a meeting on written consent, setting forth the
action so taken, signed by the holders of all outstanding shares
entitled to vote thereon.
SECTION 10. Meaning of Certain Terms. As used herein in
------------------------
respect of the right to notice of a meeting of shareholders or a
waiver thereof or to participate or vote thereat or to consent or
dissent in writing in lieu of a meeting, as the case may be, the terms
"share" and "shareholder" or "shareholders" refer to an outstanding
share or shares and to a holder or holders of record of outstanding
shares, respectively, when the Corporation is authorized to issue only
one class of shares, and said references are also intended to include
any outstanding share or shares and any holder or holders of record of
outstanding shares of any class upon which or upon whom the Articles
of Incorporation confers such rights, where there are two or more
classes or series of shares, or upon which or upon whom the Business
Corporation Law confers such rights, notwithstanding that the Articles
of Incorporation may provide for more than one class or series of
shares, one or more of which are limited in or denied such rights
thereunder.
ARTICLE II
Board of Directors
------------------
SECTION 1. General Powers. The business, property and
--------------
affairs of the Corporation shall be managed by or under the direction
of its Board of Directors.
<PAGE>
SECTION 2. Qualification; Number; Term. (a) Each director
---------------------------
shall be at least 18 years of age. A director need not be a
shareholder, a citizen of the United States, or a resident of the
Commonwealth of Pennsylvania. The number of directors constituting
the entire Board of Directors shall be at least three, except that
where all the shares are owned beneficially and of record by fewer
than three shareholders, the number of directors may be less than
three but not less than the number of shareholders. Subject to the
foregoing limitation and except for the first Board of Directors, such
number may be fixed from time to time by action of the Board of
Directors or of the shareholders, or, if the number of directors is
not so fixed, the number shall be three. The number of directors may
be increased or decreased by action of the Board of Directors or
shareholders, provided that any action of the Board of Directors to
effect such increase or decrease shall require the vote of a majority
of the entire Board of Directors. The use of the phrase "entire Board
of Directors" herein refers to the total number of directors which the
Corporation would have if there were no vacancies.
(b) The first Board of Directors shall be elected by the
incorporator or incorporators of the Corporation and shall hold office
until the first annual meeting of shareholders or until their
respective successors have been elected and qualified. Thereafter,
directors who are elected at an annual meeting of shareholders, and
directors who are elected in the interim to fill vacancies and newly
created directorships, shall hold office until the next annual meeting
of shareholders and until their respective successors have been
elected and qualified. In the interim between annual meetings of
shareholders or special meetings of shareholders called for the
election of directors, newly created directorships and any vacancies
in the Board of Directors, including vacancies resulting from the
removal of directors for cause or without cause, may be filled by the
vote of a majority of the directors then in office, although less than
a quorum exists.
SECTION 3. Quorum and Manner of Voting. A majority of the
---------------------------
entire Board of Directors shall constitute a quorum for the
transaction of business. A majority of the directors present, whether
or not a quorum is present, may adjourn a meeting to another time and
place. Except as herein otherwise provided, the vote of a majority of
the directors present at the time of the vote, at a meeting duly
assembled, a quorum being present at such time, shall be the act of
the Board of Directors.
SECTION 4. Places of Meetings. Meetings of the Board of
------------------
Directors shall be held at such place within or without the
<PAGE>
Commonwealth of Pennsylvania as may from time to time be determined by
the Board of Directors, or as may be specified in the notice of the
meeting. Regular meetings of the Board of Directors shall be held at
such times and places as may from time to time be fixed by resolution
of the Board of Directors, and special meetings may be held at any
time and place upon the call of the Chairman of the Board, if any, or
of the President or any Vice-President or the Secretary or any
director by oral, telegraphic or notice duly served as set forth in
these By-laws.
SECTION 5. Annual Meeting. Following the annual meeting of
--------------
shareholders, the newly elected Board of Directors shall meet for the
purpose of the election of officers and the transaction of such other
business as may properly come before the meeting. Such meeting may be
held without notice immediately after the annual meeting of
shareholders at the same place at which such shareholders' meeting is
held.
SECTION 6. Notice of Meetings. A notice of the place,
------------------
date, time and purpose or purposes of each meeting of the Board of
Directors shall be given to each director by mailing the same at least
two days before the meeting, or by telegraphing or telephoning the
same or by delivering the same personally not later than the day
before the day of the meeting. Notice need not be given of regular
meetings of the Board of Directors. Any requirements of furnishing a
notice shall be waived by any director who signs a waiver of notice
before or after the meeting, or who attends the meeting without
protesting, prior thereto or at its commencement, the lack of notice
to such director. The notice of any meeting need not specify the
purpose of the meeting, and any and all business may be transacted at
such meeting.
SECTION 7. Organization. At all meetings of the Board of
------------
Directors, the Chairman, if any, or if none or in the Chairman's
absence or inability to act the President, or in the President's
absence or inability to act any Vice-President who is a member of the
Board of Directors, or in such Vice-President's absence or inability
to act a chairman chosen by the directors, shall preside. The
Secretary of the Corporation shall act as secretary at all meetings of
the Board of Directors when present, and in the Secretary's absence,
the presiding officer may appoint any person to act as secretary.
SECTION 8. Resignation. Any director may resign at any
-----------
time upon written notice to the Corporation and such resignation shall
take effect upon receipt thereof by the President or Secretary, unless
otherwise specified in the
<PAGE>
resignation. Except as otherwise provided by law or by the Articles
of Incorporation, any or all of the directors may be removed, with or
without cause, by the holders of a majority of the shares of stock
outstanding and entitled to vote for the election of directors.
SECTION 9. Vacancies. Unless otherwise provided in these
---------
By-laws, vacancies among the directors, whether caused by resignation,
death, disqualification, removal, an increase in the authorized number
of directors or otherwise, may be filled by the affirmative vote of a
majority of the remaining directors, although less than a quorum, or
by a sole remaining director, or, at a special meeting of the
shareholders, by the holders of shares entitled to vote for the
election of directors.
SECTION 10. Actions by Written Consent. Any action
--------------------------
required or permitted to be taken by the Board of Directors or by any
committee thereof may be taken without a meeting if all members of the
Board of Directors or of any such committee consent in writing to the
adoption of a resolution authorizing the action and the writing or
writings are filed with the minutes of the proceedings of the Board of
Directors or of any such committee.
SECTION 11. Electronic Communication. Any one or more
------------------------
members of the Board of Directors or any committee thereof may
participate in a meeting of the Board of Directors or any such
committee by means of a conference telephone or similar communications
equipment allowing all persons participating in the meeting to hear
each other at the same time. Participation by such means shall
constitute presence in person at a meeting.
ARTICLE III
Committees of the Board of Directors
------------------------------------
SECTION 1. Appointment. From time to time the Board of
-----------
Directors by a resolution adopted by a majority of the whole Board may
appoint any committee or committees for any purpose or purposes, to
the extent lawful, which shall have powers as shall be determined and
specified by the Board of Directors in the resolution of appointment.
The Board of Directors shall have full power, at any time, to fill
vacancies in, to change membership of, to designate alternate members
of, or to discharge any such committee.
<PAGE>
SECTION 2. Procedures, Quorum and Manner of Acting. Each
---------------------------------------
committee shall fix its own rules of procedure, and shall meet where
and as provided by such rules or by resolution of the Board of
Directors. Except as otherwise provided by law, the presence of a
majority of the then appointed members of a committee shall constitute
a quorum for the transaction of business by that committee, and in
every case where a quorum is present the affirmative vote of a
majority of the members of the committee present shall be the act of
the committee. Each committee shall keep minutes of its proceedings,
and actions taken by a committee shall be reported to the Board of
Directors.
SECTION 3. Action by Written Consent. Any action required
-------------------------
or permitted to be taken at any meeting of any committee of the Board
may be taken without a meeting if all the members of the committee
consent thereto in writing, and the writing or writings are filed with
the minutes of proceedings of the committee.
SECTION 4. Term; Termination. In the event any person
-----------------
shall cease to be a director of the Corporation, such person shall
simultaneously therewith cease to be a member of any committee
appointed by the Board of Directors.
ARTICLE IV
Officers
--------
SECTION 1. Election and Qualifications. The Board of
---------------------------
Directors shall elect the officers of the Corporation, which shall
include a President and a Secretary, and may include, by election or
appointment, one or more Vice-Presidents (any one or more of whom may
be given an additional designation of rank or function), a Treasurer
and such other officers as the Board may from time to time deem
proper. Each officer shall have such powers and duties as may be
prescribed by these By-laws and as may be assigned by the Board of
Directors or the President. Any two or more offices may be held by
the same person. When all of the issued and outstanding stock of the
Corporation is owned by one person, such person may hold all or any
combination of offices.
SECTION 2. Term of Office and Remuneration. The term of
-------------------------------
office of all officers shall be one year and until their respective
successors have been selected and qualified, but any officer may be
removed from office, either with or without cause, at any time by the
Board of Directors. Any vacancy in any office
<PAGE>
arising from any cause may be filled for the unexpired portion of the
term by the Board of Directors.
SECTION 3. Resignation; Removal. Any officer may resign at
--------------------
any time upon written notice to the Corporation and such resignation
shall take effect upon receipt thereof by the President or Secretary,
unless otherwise specified in the resignation. Any officer shall be
subject to removal, with or without cause, at any time by vote of a
majority of the whole Board.
SECTION 4. Chairman of the Board. The Chairman of the
---------------------
Board of Directors, if there be one, shall preside at all meetings of
the Board of Directors and shall have such other powers and duties as
may from time to time be assigned by the Board of Directors.
SECTION 5. President. The President shall be the Chief
---------
Executive Officer of the Corporation and shall have general management
and supervision of the property, business and affairs of the Corpora-
tion and over its other officers. The President shall preside at all
meetings of the shareholders and, in the absence or disability of the
Chairman of the Board of Directors, or if there be no Chairman, shall
preside at all meetings of the Board of Directors. The President may
execute and deliver in the name of the Corporation powers of attorney,
contracts, bonds and other obligations and instruments, except in
cases where the signing and execution thereof shall be expressly
delegated by the Board of Directors, or by these By-laws, to some
other officer or agent of the Corporation.
SECTION 6. Vice-President. A Vice-President may execute
--------------
and deliver in the name of the Corporation contracts and other
obligations and instruments pertaining to the regular course of such
Vice-President's duties, and shall have such other authority as from
time to time may be assigned by the Board of Directors or the
President.
SECTION 7. Treasurer. The Treasurer shall in general have
---------
all duties incident to the position of Treasurer and such other duties
as may be assigned by the Board of Directors or the President.
SECTION 8. Secretary. The Secretary shall in general have
---------
all the duties incident to the office of Secretary and such other
duties as may be assigned by the Board of Directors or the President.
<PAGE>
SECTION 9. Assistant Officers. Any assistant officer shall
------------------
have such powers and duties of the officer such assistant officer
assists as such officer or the Board of Directors shall from time to
time prescribe.
ARTICLE V
Books and Records
-----------------
SECTION 1. Location. The Corporation shall keep correct
--------
and complete books and records of account and shall keep minutes of
the proceedings of the shareholders, of the Board of Directors, and/or
of any committee which the Board of Directors may appoint, and shall
keep at the office of the Corporation in the Commonwealth of
Pennsylvania or at the office of the transfer agent or registrar, if
any, in said Commonwealth a record containing the names and addresses
of all shareholders, the number and class of shares held by each, and
the dates when such shareholders respectively became the owners of
record thereof. Any of the foregoing books, minutes or records may be
in written form or in any other form capable of being converted into
written form within a reasonable time.
SECTION 2. Addresses of Shareholders. Notices of meetings
-------------------------
and all other corporate notices may be delivered personally or mailed
to each shareholder at said shareholder's address as it appears on the
records of the Corporation.
SECTION 3. Fixing Date for Determination of Shareholders of
------------------------------------------------
Record. For the purpose of determining the shareholders entitled to
------
notice of or to vote at any meeting of shareholders or any adjournment
thereof, or to express to consent to or dissent from any proposal
without a meeting, or for the purpose of determining shareholders
entitled to receive payment of any dividend or the allotment of any
rights, or for the purpose of any other action, the Board of Directors
may fix, in advance, a record date, in accordance with the provisions
of the Business Corporation Law. If no record date is fixed, the
record date for determining shareholders entitled to notice of or to
vote at a meeting of shareholders shall be at the close of business on
the day next preceding the day on which notice is given, or, if notice
is waived, at the close of business on the day next preceding the day
on which the meeting is held. The record date for determining
shareholders for any purpose other than that specified in the
preceding sentence shall be at the close of business on the day on
which the Board of Directors adopts the resolution relating thereto.
A determination of
<PAGE>
shareholders of record entitled to notice of or to vote at a meeting
of shareholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
ARTICLE VI
Certificates Representing Shares
--------------------------------
SECTION 1. Certificates; Signatures. (a) The shares of
------------------------
the Corporation shall be represented by certificates representing
shares, in such form as the Board of Directors may from time to time
prescribe, or shall be uncertificated shares. Certificates
representing shares shall have set forth thereon the statements
prescribed by law and shall be signed by the Chairman of the Board or
the President or a Vice-President and by the Secretary or an Assistant
Secretary or a Treasurer or an Assistant Treasurer and may be sealed
with the corporate seal or a facsimile thereof. Any and all
signatures on any such certificate may be facsimiles if the
certificate is countersigned by a transfer agent or registered by a
registrar other than the Corporation itself or its employee, or the
shares are listed on a registered national securities exchange. In
case any officer who has signed or whose facsimile signature has been
placed upon a certificate shall have ceased to be such officer before
such certificate is issued, it may be issued by the Corporation with
the same effect as if such officer were an officer at the date of its
issue.
(b) Each certificate representing shares issued by the
Corporation, if the Corporation is authorized to issue shares of more
than one class, shall set forth upon the face or back of the
certificate, or shall state that the Corporation will furnish to any
shareholder upon request and without charge, a full statement of the
designation, relative rights, preferences and limitations of the
shares of each class authorized to be issued and, if the Corporation
is authorized to issue any class of preferred shares in series, the
designation, relative rights, preferences and limitations of each such
series so far as the same have been fixed and the authority of the
Board of Directors to designate and fix the relative rights,
preferences and limitations of other series.
(c) Each certificate representing shares shall state upon
the face thereof:
<PAGE>
(1) That the Corporation is formed under the laws of the
Commonwealth of Pennsylvania;
(2) The name of the person or persons to whom issued; and
(3) The number and class of shares, and the designation of
the series, if any, which such certificate represents.
(d) The name of the holder of record of the shares
represented thereby, with the number of shares and the date of issue,
shall be entered on the books of the Corporation.
SECTION 2. Transfer of Shares. Upon compliance with
------------------
provisions governing or restricting the transferability of shares, if
any, transfers of shares of the Corporation shall be made only on the
share record of the Corporation by the registered holder thereof, or
by such holder's attorney-in-fact thereunto authorized by power of
attorney duly executed and filed with the Secretary of the Corporation
or with a transfer agent or a registrar, if any, and upon the
surrender of the certificate or certificates for such shares properly
endorsed and the payment of all taxes due thereon, if any. A
certificate representing shares shall not be issued until the full
amount of consideration therefor has been paid, except as the Business
Corporation Law may otherwise permit.
SECTION 3. Fractional Shares. The Corporation may, but
-----------------
shall not be required to, issue certificates for fractions of a share
where necessary to effect transactions authorized by the Business
Corporation Law, which shall entitle the holder, in proportion to such
holder's fractional holdings, to exercise voting rights, receive divi-
dends and participate in liquidating distributions; or the Corporation
may pay in cash the fair value of fractions of a share as of the time
when those entitled to receive such fractions are determined; or it
may issue scrip in registered or bearer form over the manual or
facsimile signature of an officer of the Corporation or of its agent,
exchangeable as therein provided for full shares, but such scrip shall
not entitle the holder to any rights of a shareholder except as
therein provided. The Board of Directors shall have power and
authority to make all such rules and regulations as it may deem
expedient concerning the issue, transfer and registration of
certificates representing shares of the Corporation.
SECTION 4. Lost, Stolen or Destroyed Certificates. The
--------------------------------------
Corporation may issue a new certificate of stock in place of
<PAGE>
any certificate, theretofore issued by it, alleged to have been lost,
stolen or destroyed, and the Board of Directors may require the owner
of any lost, stolen or destroyed certificate, or his legal
representative, to give the Corporation a bond sufficient to indemnify
the Corporation against any claim that may be made against it on ac-
count of the alleged loss, theft or destruction of any such certi-
ficate or the issuance of any such new certificate.
ARTICLE VII
Dividends
---------
Subject always to the provisions of law and the Articles of
Incorporation, the Board of Directors shall have full power to
determine whether any, and, if any, what part of any, funds legally
available for the payment of dividends shall be declared as dividends
and paid to shareholders; the division of the whole or any part of
such funds of the Corporation shall rest wholly within the lawful dis-
cretion of the Board of Directors, and it shall not be required at any
time, against such discretion, to divide or pay any part of such funds
among or to the shareholders as dividends or otherwise; and before
payment of any dividend, there may be set aside out of any funds of
the Corporation available for dividends such sum or sums as the Board
of Directors from time to time, in its absolute discretion, thinks
proper as a reserve or reserves to meet contingencies, or for equal-
izing dividends, or for repairing or maintaining any property of the
Corporation, or for such other purpose as the Board of Directors shall
think conducive to the interest of the Corporation, and the Board of
Directors may modify or abolish any such reserve in the manner in
which it was created.
ARTICLE VIII
Ratification
------------
Any transaction, questioned in any law suit on the ground of
lack of authority, defective or irregular execution, adverse interest
of director, officer or shareholder, non-disclosure, miscomputation,
or the application of improper principles or practices of accounting,
may be ratified, before or after judgment, by the Board of Directors
or by the shareholders and if so ratified shall have the same force
and effect as if the questioned transaction had been originally duly
authorized. Such ratification shall be binding upon the Corporation
and its
<PAGE>
shareholders and shall constitute a bar to any claim or execution of
any judgment in respect of such questioned transaction.
ARTICLE IX
Corporate Seal
--------------
The corporate seal shall have inscribed thereon the name of
the Corporation and the year of its incorporation, and shall be in
such form and contain such other words and/or figures as the Board of
Directors shall determine. The corporate seal may be used by
printing, engraving, lithographing, stamping or otherwise making,
placing or affixing, or causing to be printed, engraved, lithographed,
stamped or otherwise made, placed or affixed, upon any paper or
document, by any process whatsoever, an impression, facsimile or other
reproduction of said corporate seal.
ARTICLE X
Fiscal Year
-----------
The fiscal year of the Corporation shall be fixed, and shall
be subject to change, by the Board of Directors. Unless otherwise
fixed by the Board of Directors, the fiscal year of the Corporation
shall be the calendar year.
ARTICLE XI
Waiver of Notice
----------------
Whenever notice is required to be given by these By-laws or
by the Articles of Incorporation or by law, a written waiver thereof,
signed by the person or persons entitled to said notice, whether
before or after the time stated therein, shall be deemed equivalent to
notice.
ARTICLE XII
Indemnification
---------------
SECTION 1. General Scope. The Corporation, to the fullest
-------------
extent permitted and in the manner required by the laws of the
Commonwealth of Pennsylvania as in effect at the time of
<PAGE>
the adoption of this Article XII or as the law may be amended from
time to time, shall, except as set forth in Article XII, Section 2
below, (i) indemnify any officer or director of the Corporation, or
any other person designated by the Board of Directors as being
entitled to indemnification (and the heirs and legal representatives
of such person) made, or threatened to be made, a party in an action
or proceeding (including, without limitation, one by or in the right
of the Corporation to procure a judgment in its favor), whether civil
or criminal, including an action by or in the right of any other
corporation of any type or kind, domestic or foreign, or any partner-
ship, joint venture, trust, employee benefit plan or other enterprise,
which any indemnified representative served in any capacity at the
request of the Corporation, by reason of the fact that such
indemnified person, or such indemnified person's testator or
intestate, was a director or officer of the Corporation or served such
other corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise in any capacity, and (ii) provide to any such
indemnified person (and the heirs and legal representatives of such
person) advances for expenses incurred in pursuing such action or
proceeding, upon receipt of an undertaking by or on behalf of such
indemnified person to repay such amount as, and to the extent,
required by the Business Corporation Law.
SECTION 2. Limitations on Indemnification. The Corporation
------------------------------
shall not indemnify any indemnified representative: (a) where such
indemnification is expressly prohibited by applicable law; (b) where
the conduct of the indemnified representative has been finally
determined (i) to constitute willful misconduct or recklessness or
(ii) to be based upon or attributable to the receipt by the
indemnified representative of a personal benefit from the Corporation
to which the indemnified representative is not legally entitled; or
(c) to the extent such indemnification has been determined to be
otherwise unlawful.
SECTION 3. Indemnification Not Exclusive. The rights
-----------------------------
granted by this Article shall not be deemed exclusive of any other
rights to which those seeking indemnification may be entitled under
any statute, agreement, vote of shareholders or disinterested
directors or otherwise. The indemnification provided by or granted
pursuant to this Article shall continue as to a person who has ceased
to be an indemnified representative in respect of matters arising
prior to such time, and shall inure to the benefit of the heirs,
executors, administrators and personal representatives of such a
person.
SECTION 4. Contract Rights; Amendment or Repeal. All
------------------------------------
rights under this Article shall be deemed a contract between the
<PAGE>
Corporation and the indemnified representative pursuant to which the
Corporation and each indemnified representative intend to be legally
bound. Any repeal, amendment or modification hereof shall be
prospective only and shall not affect any rights or obligations then
existing.
ARTICLE XIII
Bank Accounts, Drafts, Contracts, Etc.
--------------------------------------
SECTION 1. Bank Accounts and Drafts. In addition to such
------------------------
bank accounts as may be authorized by the Board of Directors, the
Treasurer or any person designated by the Treasurer, whether or not an
employee of the Corporation, may authorize such bank accounts to be
opened or maintained in the name and on behalf of the Corporation as
such person may deem necessary or appropriate, and may authorize pay-
ments from such bank accounts to be made upon and according to the
check of the Corporation in accordance with the written instructions
of the Treasurer, or other person so designated by the Treasurer.
SECTION 2. Contracts. The Board of Directors may authorize
---------
any person or persons, in the name and on behalf of the Corporation,
to enter into or execute and deliver any and all deeds, bonds,
mortgages, contracts and other obligations or instruments, and such
authority may be general or confined to specific instances.
SECTION 3. Proxies; Powers of Attorney; Other Instruments.
----------------------------------------------
The Chairman, the President or any other person designated by either
of them shall have the power and authority to execute and deliver
proxies, powers of attorney and other instruments on behalf of the
Corporation in connection with the rights and powers incident to the
ownership of stock by the Corporation. The Chairman, the President or
any other person authorized by proxy or power of attorney executed and
delivered by either of them on behalf of the Corporation may attend
and vote at any meeting of shareholders of any company in which the
Corporation may hold stock, and may exercise on behalf of the
Corporation any and all of the rights and powers incident to the
ownership of such stock at any such meeting, or otherwise as specified
in the proxy or power of attorney so authorizing any such person. The
Board of Directors, from time to time, may confer like powers upon any
other person.
SECTION 4. Financial Reports. The directors may appoint
-----------------
the Treasurer or other fiscal officer and/or the
<PAGE>
Secretary or any other officer to cause to be prepared and furnished
to shareholders entitled thereto any special financial notice and/or
financial statement, as the case may be, which may be required by any
provision of law.
ARTICLE XIV
Amendments
----------
The shareholders entitled to vote in the election of
directors may amend or repeal the By-laws and may adopt new By-laws.
Except as otherwise required by law or by the provisions of these
By-laws, the Board of Directors may also amend or repeal the By-laws
and adopt new By-laws, but By-laws adopted by the Board of Directors
may be amended or repealed by the said shareholders. Any change in
the By-laws shall take effect when adopted unless otherwise provided
for in the resolution effecting the change.
NYFS06...:\47\41847\0008\1710\BYLD126N.160
Exhibit 3.2(h)(i)
<PAGE>
BY-LAWS
OF
CHECK MART OF TEXAS, INC.
(A TEXAS CORPORATION)
-----------
ARTICLE I
Shareholders
------------
SECTION 1. Annual Meeting. The annual meeting of share
--------------
holders for the election of directors and for the transaction of such
other business as may properly come before the meeting shall be held
at the office of the Corporation in the State of Texas or at such
other place within or without the State of Texas as may be determined
by the Board of Directors and as shall be designated in the notice of
said meeting, on such date and at such time as may be determined by
the Board of Directors.
SECTION 2. Special Meetings. Special meetings of the
----------------
shareholders for the transaction of such business as may properly come
before the meeting shall be held at the office of the Corporation in
the State of Texas, or at such other place within or without the State
of Texas as may be designated from time to time by the Board of
Directors. Whenever the Board of Directors shall fail to fix such
place, or whenever shareholders entitled to call a special meeting
shall call the same, the meeting shall be held at the office of the
Corporation in the State of Texas. Special meetings of the
shareholders shall be held upon call of the Board of Directors or of
the President or any Vice-President or the Secretary or any director,
at such time as may be fixed by the Board of Directors or the
President or such Vice-President or the Secretary or such director, as
the case may be, and as shall be stated in the notice of said meeting,
except when the Texas Business Corporation Act of the State of Texas
(the "Business Corporation Law") confers upon the shareholders the
right to demand the call of such meeting and fix the date thereof.
SECTION 3. Notice of Meetings. The notice of all meetings
------------------
of shareholders shall be in writing, shall state the place, date and
hour of the meeting and, unless it is the annual meeting, shall
indicate that it is being issued by or at the direction of the person
or persons calling the meeting. The notice of an annual meeting of
shareholders shall state that the
<PAGE>
meeting is called for the election of directors and for the
transaction of such other business as may properly come before the
meeting and shall state the purpose or purposes of the meeting if any
other action is to be taken at such annual meeting which could be
taken at a special meeting. The notice of a special meeting shall, in
all instances, state the purpose or purposes for which the meeting is
called. A copy of the notice of any meeting shall be served either
personally or by first class mail, in accordance with the provisions
of the Business Corporation Law, to each shareholder at such
shareholder's record address or at such other address as such
shareholder may have furnished by request in writing to the Secretary
of the Corporation. If a meeting is adjourned to another time or
place and if any announcement of the adjourned time or place is made
at the meeting, it shall not be necessary to give notice of the
adjourned meeting unless the Board of Directors, after adjournment,
fixes a new record date for the adjourned meeting. Notice of a
meeting need not be given to any shareholder who submits a signed
waiver of notice before or after the meeting. The attendance of a
shareholder at a meeting without protesting prior to the conclusion of
the meeting the lack of notice of such meeting shall constitute a
waiver of notice by such shareholder.
SECTION 4. Shareholder Lists. A list of shareholders as of
-----------------
the record date, certified by the corporate officer responsible for
its preparation, or by the transfer agent, if any, shall be produced
at any meeting of shareholders upon the request thereat or prior
thereto of any shareholder. If the right to vote at any meeting is
challenged, the inspectors of election, if any, or the person
presiding thereat, shall require such list of shareholders to be
produced as evidence of the right of the persons challenged to vote at
such meeting, and all persons who appear from such list to be
shareholders entitled to vote thereat may vote at such meeting.
SECTION 5. Quorum. Except as otherwise provided by law or
------
the Corporation's Articles of Incorporation, a quorum for the
transaction of business at any meeting of shareholders shall consist
of the holders of record of a majority of the issued and outstanding
shares of the capital stock of the Corporation entitled to vote at the
meeting, present in person or by proxy. At all meetings of the
shareholders at which a quorum is present, all matters, except as
otherwise provided by law, in Section 7 hereunder or in the Articles
of Incorporation, shall be decided by the vote of the holders of a
majority of the shares entitled to vote thereat, that are present in
person or by proxy. If there be no such quorum, the holders of a
majority of such shares
<PAGE>
so present or represented may adjourn the meeting from time to time,
without further notice, until a quorum shall have been obtained. When
a quorum is once present to organize a meeting, it is not broken by
the subsequent withdrawal of any shareholder.
SECTION 6. Organization. Meetings of shareholders shall be
------------
presided over by the Chairman, if any, or if none or in the Chairman's
absence the President, or if none or in the President's absence a
Vice-President, or, if none of the foregoing is present, by a chairman
to be chosen by the shareholders entitled to vote who are present in
person or by proxy at the meeting. The Secretary of the Corporation,
or in the Secretary's absence an Assistant Secretary, shall act as
secretary of every meeting, but if neither the Secretary nor an
Assistant Secretary is present, the presiding officer of the meeting
shall choose any person present to act as secretary of the meeting.
SECTION 7. Voting; Proxies; Required Vote; Ballots. At
---------------------------------------
each meeting of shareholders, every shareholder shall be entitled to
vote in person or by proxy appointed by instrument in writing,
subscribed by such shareholder or by such shareholder's duly
authorized attorney-in-fact, and shall have one vote for each share
entitled to vote and registered in such shareholder's name on the
books of the Corporation on the applicable record date fixed pursuant
to these By-laws. No proxy shall be valid after the expiration of 11
months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the shareholder
executing it, except as otherwise provided by the Business Corporation
Law. At all elections of directors the voting may but need not be by
ballot and a plurality of the votes cast thereat shall elect. Except
as otherwise required by law or the Articles of Incorporation, any
other action shall be authorized by a majority of the votes cast.
SECTION 8. Inspectors. The Board of Directors, in advance
----------
of any meeting, may appoint one or more inspectors to act at the
meeting or any adjournment thereof. If an inspector or inspectors are
not so appointed, the person presiding at the meeting may, and on the
request of any shareholder shall, appoint one or more inspectors. In
case any person appointed fails to appear or act, the vacancy may be
filled by appointment made by the Board of Directors in advance of the
meeting or at the meeting by the person presiding thereat. Each
inspector, if any, before entering upon the discharge of such
inspector's duties, shall take and sign an oath to execute faithfully
the duties of inspector at such meeting with strict impartiality and
according to the best of such inspector's ability. The inspectors, if
any,
<PAGE>
shall determine the number of shares outstanding and the voting power
of each, the shares represented at the meeting, the existence of a
quorum, and the validity and effect of proxies, and shall receive
votes, ballots or consents, hear and determine all challenges and
questions arising in connection with the right to vote, count and
tabulate all votes, ballots or consents, determine the result, and do
such acts as are proper to conduct the election or vote with fairness
to all shareholders. On request of the person presiding at the
meeting or any shareholder, the inspectors shall make a report in
writing of any challenge, question or matter determined by them and
execute a certificate as to any fact found by them.
SECTION 9. Actions Without Meetings. Whenever shareholders
------------------------
are required or permitted to take any action by vote, such action may
be taken without a meeting on written consent, setting forth the
action so taken, signed by the holders of all outstanding shares
entitled to vote thereon.
SECTION 10. Meaning of Certain Terms. As used herein in
------------------------
respect of the right to notice of a meeting of shareholders or a
waiver thereof or to participate or vote thereat or to consent or
dissent in writing in lieu of a meeting, as the case may be, the terms
"share" and "shareholder" or "shareholders" refer to an outstanding
share or shares and to a holder or holders of record of outstanding
shares, respectively, when the Corporation is authorized to issue only
one class of shares, and said references are also intended to include
any outstanding share or shares and any holder or holders of record of
outstanding shares of any class upon which or upon whom the Articles
of Incorporation confers such rights, where there are two or more
classes or series of shares, or upon which or upon whom the Business
Corporation Law confers such rights, notwithstanding that the Articles
of Incorporation may provide for more than one class or series of
shares, one or more of which are limited in or denied such rights
thereunder.
ARTICLE II
Board of Directors
------------------
SECTION 1. General Powers. The business, property and
--------------
affairs of the Corporation shall be managed by or under the direction
of its Board of Directors.
SECTION 2. Qualification; Number; Term. (a) Each director
---------------------------
shall be at least 18 years of age. A director need not
<PAGE>
be a shareholder, a citizen of the United States, or a resident of the
State of Texas. The number of directors constituting the entire Board
of Directors shall be at least three, except that where all the shares
are owned beneficially and of record by fewer than three shareholders,
the number of directors may be less than three but not less than the
number of shareholders. Subject to the foregoing limitation and
except for the first Board of Directors, such number may be fixed from
time to time by action of the Board of Directors or of the share-
holders, or, if the number of directors is not so fixed, the number
shall be three. The number of directors may be increased or decreased
by action of the Board of Directors or shareholders, provided that any
action of the Board of Directors to effect such increase or decrease
shall require the vote of a majority of the entire Board of Directors.
The use of the phrase "entire Board of Directors" herein refers to the
total number of directors which the Corporation would have if there
were no vacancies.
(b) The first Board of Directors shall be elected by the
incorporator or incorporators of the Corporation and shall hold office
until the first annual meeting of shareholders or until their
respective successors have been elected and qualified. Thereafter,
directors who are elected at an annual meeting of shareholders, and
directors who are elected in the interim to fill vacancies and newly
created directorships, shall hold office until the next annual meeting
of shareholders and until their respective successors have been
elected and qualified. In the interim between annual meetings of
shareholders or special meetings of shareholders called for the
election of directors, newly created directorships and any vacancies
in the Board of Directors, including vacancies resulting from the
removal of directors for cause or without cause, may be filled by the
vote of a majority of the directors then in office, although less than
a quorum exists.
SECTION 3. Quorum and Manner of Voting. A majority of the
---------------------------
entire Board of Directors shall constitute a quorum for the
transaction of business. A majority of the directors present, whether
or not a quorum is present, may adjourn a meeting to another time and
place. Except as herein otherwise provided, the vote of a majority of
the directors present at the time of the vote, at a meeting duly
assembled, a quorum being present at such time, shall be the act of
the Board of Directors.
SECTION 4. Places of Meetings. Meetings of the Board of
------------------
Directors shall be held at such place within or without the State of
Texas as may from time to time be determined by the Board of
Directors, or as may be specified in the notice of the
<PAGE>
meeting. Regular meetings of the Board of Directors shall be held at
such times and places as may from time to time be fixed by resolution
of the Board of Directors, and special meetings may be held at any
time and place upon the call of the Chairman of the Board, if any, or
of the President or any Vice-President or the Secretary or any
director by oral, telegraphic or notice duly served as set forth in
these By-laws.
SECTION 5. Annual Meeting. Following the annual meeting of
--------------
shareholders, the newly elected Board of Directors shall meet for the
purpose of the election of officers and the transaction of such other
business as may properly come before the meeting. Such meeting may be
held without notice immediately after the annual meeting of
shareholders at the same place at which such shareholders' meeting is
held.
SECTION 6. Notice of Meetings. A notice of the place,
------------------
date, time and purpose or purposes of each meeting of the Board of
Directors shall be given to each director by mailing the same at least
two days before the meeting, or by telegraphing or telephoning the
same or by delivering the same personally not later than the day
before the day of the meeting. Notice need not be given of regular
meetings of the Board of Directors. Any requirements of furnishing a
notice shall be waived by any director who signs a waiver of notice
before or after the meeting, or who attends the meeting without
protesting, prior thereto or at its commencement, the lack of notice
to such director. The notice of any meeting need not specify the
purpose of the meeting, and any and all business may be transacted at
such meeting.
SECTION 7. Organization. At all meetings of the Board of
------------
Directors, the Chairman, if any, or if none or in the Chairman's
absence or inability to act the President, or in the President's
absence or inability to act any Vice-President who is a member of the
Board of Directors, or in such Vice-President's absence or inability
to act a chairman chosen by the directors, shall preside. The
Secretary of the Corporation shall act as secretary at all meetings of
the Board of Directors when present, and in the Secretary's absence,
the presiding officer may appoint any person to act as secretary.
SECTION 8. Resignation. Any director may resign at any
-----------
time upon written notice to the Corporation and such resignation shall
take effect upon receipt thereof by the President or Secretary, unless
otherwise specified in the resignation. Except as otherwise provided
by law or by the Articles of Incorporation, any or all of the
directors may be
<PAGE>
removed, with or without cause, by the holders of a majority of the
shares of stock outstanding and entitled to vote for the election of
directors.
SECTION 9. Vacancies. Unless otherwise provided in these
---------
By-laws, vacancies among the directors, whether caused by resignation,
death, disqualification, removal, an increase in the authorized number
of directors or otherwise, may be filled by the affirmative vote of a
majority of the remaining directors, although less than a quorum, or
by a sole remaining director, or, at a special meeting of the
shareholders, by the holders of shares entitled to vote for the
election of directors.
SECTION 10. Actions by Written Consent. Any action
--------------------------
required or permitted to be taken by the Board of Directors or by any
committee thereof may be taken without a meeting if all members of the
Board of Directors or of any such committee consent in writing to the
adoption of a resolution authorizing the action and the writing or
writings are filed with the minutes of the proceedings of the Board of
Directors or of any such committee.
SECTION 11. Electronic Communication. Any one or more
------------------------
members of the Board of Directors or any committee thereof may
participate in a meeting of the Board of Directors or any such
committee by means of a conference telephone or similar communications
equipment allowing all persons participating in the meeting to hear
each other at the same time. Participation by such means shall
constitute presence in person at a meeting.
ARTICLE III
Committees of the Board of Directors
------------------------------------
SECTION 1. Appointment. From time to time the Board of
-----------
Directors by a resolution adopted by a majority of the whole Board may
appoint any committee or committees for any purpose or purposes, to
the extent lawful, which shall have powers as shall be determined and
specified by the Board of Directors in the resolution of appointment.
The Board of Directors shall have full power, at any time, to fill
vacancies in, to change membership of, to designate alternate members
of, or to discharge any such committee.
SECTION 2. Procedures, Quorum and Manner of Acting. Each
---------------------------------------
committee shall fix its own rules of procedure, and shall meet where
and as provided by such rules or by resolution of the
<PAGE>
Board of Directors. Except as otherwise provided by law, the presence
of a majority of the then appointed members of a committee shall
constitute a quorum for the transaction of business by that committee,
and in every case where a quorum is present the affirmative vote of a
majority of the members of the committee present shall be the act of
the committee. Each committee shall keep minutes of its proceedings,
and actions taken by a committee shall be reported to the Board of
Directors.
SECTION 3. Action by Written Consent. Any action required
-------------------------
or permitted to be taken at any meeting of any committee of the Board
may be taken without a meeting if all the members of the committee
consent thereto in writing, and the writing or writings are filed with
the minutes of proceedings of the committee.
SECTION 4. Term; Termination. In the event any person
-----------------
shall cease to be a director of the Corporation, such person shall
simultaneously therewith cease to be a member of any committee
appointed by the Board of Directors.
ARTICLE IV
Officers
--------
SECTION 1. Election and Qualifications. The Board of
---------------------------
Directors shall elect the officers of the Corporation, which shall
include a President and a Secretary, and may include, by election or
appointment, one or more Vice-Presidents (any one or more of whom may
be given an additional designation of rank or function), a Treasurer
and such other officers as the Board may from time to time deem
proper. Each officer shall have such powers and duties as may be
prescribed by these By-laws and as may be assigned by the Board of
Directors or the President. Any two or more offices may be held by
the same person. When all of the issued and outstanding stock of the
Corporation is owned by one person, such person may hold all or any
combination of offices.
SECTION 2. Term of Office and Remuneration. The term of
-------------------------------
office of all officers shall be one year and until their respective
successors have been elected and qualified, but any officer may be
removed from office, either with or without cause, at any time by the
Board of Directors. Any vacancy in any office arising from any cause
may be filled for the unexpired portion of the term by the Board of
Directors.
<PAGE>
SECTION 3. Resignation; Removal. Any officer may resign at
--------------------
any time upon written notice to the Corporation and such resignation
shall take effect upon receipt thereof by the President or Secretary,
unless otherwise specified in the resignation. Any officer shall be
subject to removal, with or without cause, at any time by vote of a
majority of the whole Board.
SECTION 4. Chairman of the Board. The Chairman of the
---------------------
Board of Directors, if there be one, shall preside at all meetings of
the Board of Directors and shall have such other powers and duties as
may from time to time be assigned by the Board of Directors.
SECTION 5. President. The President shall be the Chief
---------
Executive Officer of the Corporation and shall have general management
and supervision of the property, business and affairs of the Corpora-
tion and over its other officers. The President shall preside at all
meetings of the shareholders and, in the absence or disability of the
Chairman of the Board of Directors, or if there be no Chairman, shall
preside at all meetings of the Board of Directors. The President may
execute and deliver in the name of the Corporation powers of attorney,
contracts, bonds and other obligations and instruments, except in
cases where the signing and execution thereof shall be expressly
delegated by the Board of Directors, or by these By-laws, to some
other officer or agent of the Corporation.
SECTION 6. Vice-President. A Vice-President may execute
--------------
and deliver in the name of the Corporation contracts and other
obligations and instruments pertaining to the regular course of such
Vice-President's duties, and shall have such other authority as from
time to time may be assigned by the Board of Directors or the
President.
SECTION 7. Treasurer. The Treasurer shall in general have
---------
all duties incident to the position of Treasurer and such other duties
as may be assigned by the Board of Directors or the President.
SECTION 8. Secretary. The Secretary shall in general have
---------
all the duties incident to the office of Secretary and such other
duties as may be assigned by the Board of Directors or the President.
SECTION 9. Assistant Officers. Any assistant officer shall
------------------
have such powers and duties of the officer such assistant
<PAGE>
officer assists as such officer or the Board of Directors shall from
time to time prescribe.
ARTICLE V
Books and Records
-----------------
SECTION 1. Location. The Corporation shall keep correct
--------
and complete books and records of account and shall keep minutes of
the proceedings of the shareholders, of the Board of Directors, and/or
of any committee which the Board of Directors may appoint, and shall
keep at the office of the Corporation in the State of Texas or at the
office of the transfer agent or registrar, if any, a record containing
the names and addresses of all shareholders, the number and class of
shares held by each, and the dates when such shareholders respectively
became the owners of record thereof. Any of the foregoing books,
minutes or records may be in written form or in any other form capable
of being converted into written form within a reasonable time.
SECTION 2. Addresses of Shareholders. Notices of meetings
-------------------------
and all other corporate notices may be delivered personally or mailed
to each shareholder at said shareholder's address as it appears on the
records of the Corporation.
SECTION 3. Fixing Date for Determination of Shareholders of
------------------------------------------------
Record. For the purpose of determining the shareholders entitled to
------
notice of or to vote at any meeting of shareholders or any adjournment
thereof, or to express to consent to or dissent from any proposal
without a meeting, or for the purpose of determining shareholders
entitled to receive payment of any dividend or the allotment of any
rights, or for the purpose of any other action, the Board of Directors
may fix, in advance, a record date, in accordance with the provisions
of the Business Corporation Law. If no record date is fixed, the
record date for determining shareholders entitled to notice of or to
vote at a meeting of shareholders shall be at the close of business on
the day next preceding the day on which notice is given, or, if notice
is waived, at the close of business on the day next preceding the day
on which the meeting is held. The record date for determining
shareholders for any purpose other than that specified in the
preceding sentence shall be at the close of business on the day on
which the Board of Directors adopts the resolution relating thereto.
A determination of shareholders of record entitled to notice of or to
vote at a meeting of shareholders shall apply to any adjournment of
the
<PAGE>
meeting; provided, however, that the Board of Directors may fix a new
record date for the adjourned meeting.
ARTICLE VI
Certificates Representing Shares
--------------------------------
SECTION 1. Certificates; Signatures. (a) The shares of
------------------------
the Corporation shall be represented by certificates representing
shares, in such form as the Board of Directors may from time to time
prescribe, or shall be uncertificated shares. Certificates
representing shares shall have set forth thereon the statements
prescribed by law and shall be signed by the Chairman of the Board or
the President or a Vice-President and by the Secretary or an Assistant
Secretary or a Treasurer or an Assistant Treasurer and may be sealed
with the corporate seal or a facsimile thereof. Any and all
signatures on any such certificate may be facsimiles if the
certificate is countersigned by a transfer agent or registered by a
registrar other than the Corporation itself or its employee, or the
shares are listed on a registered national securities exchange. In
case any officer who has signed or whose facsimile signature has been
placed upon a certificate shall have ceased to be such officer before
such certificate is issued, it may be issued by the Corporation with
the same effect as if such officer were an officer at the date of its
issue.
(b) Each certificate representing shares issued by the
Corporation, if the Corporation is authorized to issue shares of more
than one class, shall set forth upon the face or back of the
certificate, or shall state that the Corporation will furnish to any
shareholder upon request and without charge, a full statement of the
designation, relative rights, preferences and limitations of the
shares of each class authorized to be issued and, if the Corporation
is authorized to issue any class of preferred shares in series, the
designation, relative rights, preferences and limitations of each such
series so far as the same have been fixed and the authority of the
Board of Directors to designate and fix the relative rights,
preferences and limitations of other series.
(c) Each certificate representing shares shall state upon
the face thereof:
(1) That the Corporation is formed under the laws of the
State of Texas;
<PAGE>
(2) The name of the person or persons to whom issued; and
(3) The number and class of shares, the par value of each
such share and the designation of the series, if any,
which such certificate represents.
(d) The name of the holder of record of the shares
represented thereby, with the number of shares and the date of issue,
shall be entered on the books of the Corporation.
SECTION 2. Transfer of Shares. Upon compliance with
------------------
provisions governing or restricting the transferability of shares, if
any, transfers of shares of the Corporation shall be made only on the
share record of the Corporation by the registered holder thereof, or
by such holder's attorney-in-fact thereunto authorized by power of
attorney duly executed and filed with the Secretary of the Corporation
or with a transfer agent or a registrar, if any, and upon the
surrender of the certificate or certificates for such shares properly
endorsed and the payment of all taxes due thereon, if any. A
certificate representing shares shall not be issued until the full
amount of consideration therefor has been paid, except as the Business
Corporation Law may otherwise permit.
SECTION 3. Fractional Shares. The Corporation may, but
-----------------
shall not be required to, issue certificates for fractions of a share
where necessary to effect transactions authorized by the Business
Corporation Law, which shall entitle the holder, in proportion to such
holder's fractional holdings, to exercise voting rights, receive divi-
dends and participate in liquidating distributions; or the Corporation
may pay in cash the fair value of fractions of a share as of the time
when those entitled to receive such fractions are determined; or it
may issue scrip in registered or bearer form over the manual or
facsimile signature of an officer of the Corporation or of its agent,
exchangeable as therein provided for full shares, but such scrip shall
not entitle the holder to any rights of a shareholder except as
therein provided. The Board of Directors shall have power and
authority to make all such rules and regulations as it may deem
expedient concerning the issue, transfer and registration of
certificates representing shares of the Corporation.
SECTION 4. Lost, Stolen or Destroyed Certificates. The
--------------------------------------
Corporation may issue a new certificate of stock in place of any
certificate, theretofore issued by it, alleged to have been lost,
stolen or destroyed, and the Board of Directors may require the owner
of any lost, stolen or destroyed certificate, or his
<PAGE>
legal representative, to give the Corporation a bond sufficient to
indemnify the Corporation against any claim that may be made against
it on account of the alleged loss, theft or destruction of any such
certificate or the issuance of any such new certificate.
ARTICLE VII
Dividends
---------
Subject always to the provisions of law and the Articles of
Incorporation, the Board of Directors shall have full power to
determine whether any, and, if any, what part of any, funds legally
available for the payment of dividends shall be declared as dividends
and paid to shareholders; the division of the whole or any part of
such funds of the Corporation shall rest wholly within the lawful dis-
cretion of the Board of Directors, and it shall not be required at any
time, against such discretion, to divide or pay any part of such funds
among or to the shareholders as dividends or otherwise; and before
payment of any dividend, there may be set aside out of any funds of
the Corporation available for dividends such sum or sums as the Board
of Directors from time to time, in its absolute discretion, thinks
proper as a reserve or reserves to meet contingencies, or for equal-
izing dividends, or for repairing or maintaining any property of the
Corporation, or for such other purpose as the Board of Directors shall
think conducive to the interest of the Corporation, and the Board of
Directors may modify or abolish any such reserve in the manner in
which it was created.
ARTICLE VIII
Ratification
------------
Any transaction, questioned in any law suit on the ground of
lack of authority, defective or irregular execution, adverse interest
of director, officer or shareholder, non-disclosure, miscomputation,
or the application of improper principles or practices of accounting,
may be ratified, before or after judgment, by the Board of Directors
or by the shareholders and if so ratified shall have the same force
and effect as if the questioned transaction had been originally duly
authorized. Such ratification shall be binding upon the Corporation
and its shareholders and shall constitute a bar to any claim or
execution of any judgment in respect of such questioned transaction.
<PAGE>
ARTICLE IX
Corporate Seal
--------------
The corporate seal shall have inscribed thereon the name of
the Corporation and the year of its incorporation, and shall be in
such form and contain such other words and/or figures as the Board of
Directors shall determine. The corporate seal may be used by
printing, engraving, lithographing, stamping or otherwise making,
placing or affixing, or causing to be printed, engraved, lithographed,
stamped or otherwise made, placed or affixed, upon any paper or
document, by any process whatsoever, an impression, facsimile or other
reproduction of said corporate seal.
ARTICLE X
Fiscal Year
-----------
The fiscal year of the Corporation shall be fixed, and shall
be subject to change, by the Board of Directors. Unless otherwise
fixed by the Board of Directors, the fiscal year of the Corporation
shall be the calendar year.
ARTICLE XI
Waiver of Notice
----------------
Whenever notice is required to be given by these By-laws or
by the Articles of Incorporation or by law, a written waiver thereof,
signed by the person or persons entitled to said notice, whether
before or after the time stated therein, shall be deemed equivalent to
notice.
ARTICLE XII
Indemnification
---------------
SECTION 1. General Scope. The Corporation, to the fullest
-------------
extent permitted and in the manner required by the laws of the State
of Texas as in effect at the time of the adoption of this Article XII
or as the law may be amended from time to time, shall, except as set
forth in Article XII, Section 2 below, (i) indemnify any officer or
director of the Corporation, or any other person designated by the
Board of Directors as being
<PAGE>
entitled to indemnification (and the heirs and legal representatives
of such person) made, or threatened to be made, a party in an action
or proceeding (including, without limitation, one by or in the right
of the Corporation to procure a judgment in its favor), whether civil
or criminal, including an action by or in the right of any other
corporation of any type or kind, domestic or foreign, or any partner-
ship, joint venture, trust, employee benefit plan or other enterprise,
which any indemnified representative served in any capacity at the
request of the Corporation, by reason of the fact that such
indemnified person, or such indemnified person's testator or
intestate, was a director or officer of the Corporation or served such
other corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise in any capacity, and (ii) provide to any such
indemnified person (and the heirs and legal representatives of such
person) advances for expenses incurred in pursuing such action or
proceeding, upon receipt of an undertaking by or on behalf of such
indemnified person to repay such amount as, and to the extent,
required by the Business Corporation Law.
SECTION 2. Limitations on Indemnification. The Corporation
------------------------------
shall not indemnify any indemnified representative: (a) where such
indemnification is expressly prohibited by applicable law; (b) where
the conduct of the indemnified representative has been finally
determined (i) to constitute willful misconduct or recklessness or
(ii) to be based upon or attributable to the receipt by the
indemnified representative of a personal benefit from the Corporation
to which the indemnified representative is not legally entitled; or
(c) to the extent such indemnification has been determined to be
otherwise unlawful.
SECTION 3. Indemnification Not Exclusive. The rights
-----------------------------
granted by this Article shall not be deemed exclusive of any other
rights to which those seeking indemnification may be entitled under
any statute, agreement, vote of shareholders or disinterested
directors or otherwise. The indemnification provided by or granted
pursuant to this Article shall continue as to a person who has ceased
to be an indemnified representative in respect of matters arising
prior to such time, and shall inure to the benefit of the heirs,
executors, administrators and personal representatives of such a
person.
SECTION 4. Contract Rights; Amendment or Repeal. All
------------------------------------
rights under this Article shall be deemed a contract between the
Corporation and the indemnified representative pursuant to which the
Corporation and each indemnified representative intend to be legally
bound. Any repeal, amendment or modification hereof
<PAGE>
shall be prospective only and shall not affect any rights or
obligations then existing.
ARTICLE XIII
Bank Accounts, Drafts, Contracts, Etc.
--------------------------------------
SECTION 1. Bank Accounts and Drafts. In addition to such
------------------------
bank accounts as may be authorized by the Board of Directors, the
Treasurer or any person designated by the Treasurer, whether or not an
employee of the Corporation, may authorize such bank accounts to be
opened or maintained in the name and on behalf of the Corporation as
such person may deem necessary or appropriate, and may authorize pay-
ments from such bank accounts to be made upon and according to the
check of the Corporation in accordance with the written instructions
of the Treasurer, or other person so designated by the Treasurer.
SECTION 2. Contracts. The Board of Directors may authorize
---------
any person or persons, in the name and on behalf of the Corporation,
to enter into or execute and deliver any and all deeds, bonds,
mortgages, contracts and other obligations or instruments, and such
authority may be general or confined to specific instances.
SECTION 3. Proxies; Powers of Attorney; Other Instruments.
----------------------------------------------
The Chairman, the President or any other person designated by either
of them shall have the power and authority to execute and deliver
proxies, powers of attorney and other instruments on behalf of the
Corporation in connection with the rights and powers incident to the
ownership of stock by the Corporation. The Chairman, the President or
any other person authorized by proxy or power of attorney executed and
delivered by either of them on behalf of the Corporation may attend
and vote at any meeting of shareholders of any company in which the
Corporation may hold stock, and may exercise on behalf of the
Corporation any and all of the rights and powers incident to the
ownership of such stock at any such meeting, or otherwise as specified
in the proxy or power of attorney so authorizing any such person. The
Board of Directors, from time to time, may confer like powers upon any
other person.
SECTION 4. Financial Reports. The directors may appoint
-----------------
the Treasurer or other fiscal officer and/or the Secretary or any
other officer to cause to be prepared and furnished to shareholders
entitled thereto any special financial
<PAGE>
notice and/or financial statement, as the case may be, which may be
required by any provision of law.
ARTICLE XIV
Amendments
----------
The shareholders entitled to vote in the election of
directors may amend or repeal the By-laws and may adopt new By-laws.
Except as otherwise required by law or by the provisions of these
By-laws, the Board of Directors may also amend or repeal the By-laws
and adopt new By-laws, but By-laws adopted by the Board of Directors
may be amended or repealed by the said shareholders. Any change in
the By-laws shall take effect when adopted unless otherwise provided
for in the resolution effecting the change.
NYFS06...:\47\41847\0008\1710\BYLD126R.110
Exhibit 3.2(i)(i)
<PAGE>
BY-LAWS
OF
CHECKMART OF UTAH, INC.
(a Utah corporation)
ARTICLE I
Shareholders
------------
SECTION 1. Annual Meetings. The annual meeting of
---------------
shareholders for the election of directors and for the transaction of
such other business as may properly come before the meeting shall be
held each year at such date and time, within or without the State of
Utah, as the Board of Directors shall determine.
SECTION 2. Special Meetings. Special meetings of
----------------
shareholders for the transaction of such business as may properly come
before the meeting may be called by order of the Board of Directors or
by shareholders holding together at least ten percent of all the
shares of the Corporation entitled to vote at the meeting, and shall
be held at such date and time, within or without the State of Utah, as
may be specified by such order. Whenever the order shall fail to fix
such place, the meeting shall be held at the principal executive
office of the Corporation.
SECTION 3. Notice of Meetings. Written notice of all
------------------
meetings of the shareholders, stating the place, date and time of the
meeting and the place within the city or other municipality or
community at which the list of shareholders may be examined, shall be
mailed or delivered to each shareholder not less than 10 nor more than
60 days prior to the meeting. Notice of any special meeting shall
state in general terms the purpose or purposes for which the meeting
is to be held.
SECTION 4. Shareholder Lists. After fixing a record date
-----------------
for a shareholders' meeting, the officer who has charge of the share
ledger of the Corporation shall prepare and make a complete list of
the shareholders entitled to vote at the meeting, arranged (by voting
group) in alphabetical order, and showing the address of each
shareholder and the number of shares registered in the name of each
shareholder. Such list shall be
<PAGE>
open to the examination of any shareholder, for any purpose germane to
the meeting, either at a place within the city where the meeting is to
be held, which place shall be specified in the notice of the meeting,
or, if not so specified, at the corporation's principal office. The
list shall also be produced and kept at the time and place of the
meeting during the whole time thereof, and may be inspected by any
shareholder who is present.
The share ledger shall be the only evidence as to who are
the shareholders entitled to examine the share ledger, the list
required by this section or the books of the Corporation, or to vote
in person or by proxy at any meeting of shareholders.
SECTION 5. Quorum. Except as otherwise provided by law or
------
the Corporation's Articles of Incorporation, a quorum for the
transaction of business at any meeting of shareholders shall consist
of the holders of record of a majority of the issued and outstanding
shares of the Corporation entitled to vote at the meeting, present in
person or by proxy. At all meetings of the shareholders at which a
quorum is present, all matters, except as otherwise provided by law or
the Articles of Incorporation, shall be decided by the vote of the
holders of a majority of the shares entitled to vote thereat present
in person or by proxy. If there be no such quorum, the holders of a
majority of such shares so present or represented may adjourn the
meeting from time to time, without further notice, until a quorum
shall have been obtained. When a quorum is once present it is not
broken by the subsequent withdrawal of any shareholder.
SECTION 6. Organization. Meetings of shareholders shall be
------------
presided over by the Chairman, if any, or if none or in the Chairman's
absence the Vice-Chairman, if any, or if none or in the Vice-
Chairman's absence the President, if any, or if none or in the
President's absence a Vice-President, or, if none of the foregoing is
present, by a chairman to be chosen by the shareholders entitled to
vote who are present in person or by proxy at the meeting. The
Secretary of the Corporation, or in the Secretary's absence an
Assistant Secretary, shall act as secretary of every meeting, but if
neither the Secretary nor an Assistant Secretary is present, the
presiding officer of the meeting shall appoint any person present to
act as secretary of the meeting.
SECTION 7. Voting; Proxies; Required Vote.
------------------------------
(a) At each meeting of shareholders, every shareholder shall be
entitled to vote in person or by proxy appointed by instrument in
writing, subscribed by such shareholder or by such shareholder's
<PAGE>
duly authorized attorney-in-fact (but no such proxy shall be voted or
acted upon after 11 months from its date, unless the proxy provides
for a longer period), and, unless the Articles of Incorporation
provides otherwise, shall have one vote for each share entitled to
vote registered in the name of such shareholder on the books of the
Corporation on the applicable record date fixed pursuant to these
By-laws. At all elections of directors the voting may but need not be
by ballot and a plurality of the votes cast there shall elect. Except
as otherwise required by law or the Articles of Incorporation, any
other action shall be authorized by a majority of the votes cast.
(b) Any action required or permitted to be taken at any
meeting of shareholders may, except as otherwise required by law or
the Articles of Incorporation, be taken without a meeting, without
prior notice and without a vote, if a consent in writing, setting
forth the action so taken, shall be signed by the holders of record of
the issued and outstanding shares of the Corporation having a majority
of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and
voted, and the writing or writings are filed with the permanent
records of the Corporation. Prompt notice of the taking of corporate
action without a meeting by less than unanimous written consent shall
be given to those shareholders who have not consented in writing.
[(c) Where a separate vote by a class or classes, present
in person or represented by proxy, shall constitute a quorum entitled
to vote on that matter, the affirmative vote of the majority of shares
of such class or classes present in person or represented by proxy at
the meeting shall be the act of such class, unless otherwise provided
in the Corporation's Articles of Incorporation.]
SECTION 8. Inspectors. The Board of Directors, in advance
----------
of any meeting, may, but need not, appoint one or more inspectors of
election to act at the meeting or any adjournment thereof. If an
inspector or inspectors are not so appointed, the person presiding at
the meeting may, but need not, appoint one or more inspectors. In
case any person who may be appointed as an inspector fails to appear
or act, the vacancy may be filled by appointment made by the directors
in advance of the meeting or at the meeting by the person presiding
thereat. Each inspector, if any, before entering upon the discharge
of his or her duties, shall take and sign an oath faithfully to
execute the duties of inspector at such meeting with strict
impartiality and according to the best of his ability. The
inspectors, if any, shall determine the number of shares outstanding
and the voting power
<PAGE>
of each, the shares represented at the meeting, the existence of a
quorum, and the validity and effect of proxies, and shall receive
votes, ballots or consents, hear and determine all challenges and
questions arising in connection with the right to vote, count and
tabulate all votes, ballots or consents, determine the result, and do
such acts as are proper to conduct the election or vote with fairness
to all shareholders. On request of the person presiding at the
meeting, the inspector or inspectors, if any, shall make a report in
writing of any challenge, question or matter determined by such
inspector or inspectors and execute a certificate of any fact found by
such inspector or inspectors.
ARTICLE II
Board of Directors
------------------
SECTION 1. General Powers. The business, property and
--------------
affairs of the Corporation shall be managed by, or under the direction
of, the Board of Directors.
SECTION 2. Qualification; Number; Term; Remuneration. (a)
-----------------------------------------
Each director shall be at a natural person least 18 years of age. A
director need not be a shareholder, or a resident of the State of
Utah. The number of directors constituting the entire Board shall be
at least two and no more than six, or such larger number as may be
fixed from time to time by action of the shareholders or Board of
Directors, one of whom may be selected by the Board of Directors to be
its Chairman. The use of the phrase "entire Board" herein refers to
the total number of directors which the Corporation would have if
there were no vacancies.
(b) Directors who are elected at an annual meeting of
shareholders, and directors who are elected in the interim to fill
vacancies and newly created directorships, shall hold office until the
next annual meeting of shareholders and until their successors are
elected and qualified or until their earlier resignation or removal.
(c) Directors may be paid their expenses, if any, of
attendance at each meeting of the Board of Directors and may be paid a
fixed sum for attendance at each meeting of the Board of Directors or
a stated salary as director. No such payment shall preclude any
director from serving the Corporation in any other capacity and
receiving compensation therefor. Members of special
<PAGE>
or standing committees may be allowed like compensation for attending
committee meetings.
SECTION 3. Quorum and Manner of Voting. Except as
---------------------------
otherwise provided by law, a majority of the entire Board shall
constitute a quorum. A majority of the directors present, whether or
not a quorum is present, may adjourn a meeting from time to time to
another time and place without notice. The vote of the majority of
the directors present at a meeting at which a quorum is present shall
be the act of the Board of Directors.
SECTION 4. Places of Meetings. Meetings of the Board of
------------------
Directors may be held at any place within or without the State of
Utah, as may from time to time be fixed by resolution of the Board of
Directors, or as may be specified in the notice of meeting.
SECTION 5. Annual Meeting. Following the annual meeting of
--------------
shareholders, the newly elected Board of Directors shall meet for the
purpose of the election of officers and the transaction of such other
business as may properly come before the meeting. Such meeting may be
held without notice immediately after the annual meeting of
shareholders at the same place at which such shareholders' meeting is
held.
SECTION 6. Regular Meetings. Regular meetings of the Board
----------------
of Directors shall be held at such times and places as the Board of
Directors shall from time to time by resolution determine. Notice
need not be given of regular meetings of the Board of Directors held
at times and places fixed by resolution of the Board of Directors.
SECTION 7. Special Meetings. Special meetings of the Board
----------------
of Directors shall be held whenever called by the Chairman of the
Board, President or by a majority of the directors then in office.
SECTION 8. Notice of Meetings. A notice of the place, date
------------------
and time of each meeting of the Board of Directors shall be given to
each director at least two days before the special meeting.
SECTION 9. Organization. At all meetings of the Board of
------------
Directors, the Chairman, if any, or if none or in the Chairman's
absence or inability to act the President, or in the President's
absence or inability to act any Vice-President who is a member of the
Board of Directors, or in such Vice-President's absence or inability
to act a chairman chosen by the directors,
<PAGE>
shall preside. The Secretary of the Corporation shall act as
secretary at all meetings of the Board of Directors when present, and,
in the Secretary's absence, the presiding officer may appoint any
person to act as secretary.
SECTION 10. Resignation. Any director may resign at any
-----------
time upon written notice to the Corporation and such resignation shall
take effect upon receipt thereof by the Corporation, unless otherwise
specified in the resignation. Any or all of the directors may be
removed, with or without cause, by the holders of a majority of the
shares outstanding and entitled to vote for the election of directors.
A Director may be removed by the shareholders only at a meeting called
for the purpose of removing the Director and the meeting notice must
state that the purpose, or one of the purposes, of the meeting is
removal of the Director.
SECTION 11. Vacancies. Unless otherwise provided in these
---------
By-laws or the Articles of Incorporation, vacancies on the Board of
Directors, whether caused by resignation, death, disqualification,
removal, an increase in the authorized number of directors or
otherwise, may be filled by the affirmative vote of a majority of the
remaining directors, although less than a quorum, or by a sole
remaining director, or at a special meeting of the shareholders, by
the holders of shares entitled to vote for the election of directors.
SECTION 12. Action by Written Consent. Any action required
-------------------------
or permitted to be taken at any meeting of the Board of Directors may
be taken without a meeting if all the directors consent thereto in
writing, and the writing or writings are filed with the minutes of
proceedings of the Board of Directors.
ARTICLE III
Committees
----------
SECTION 1. Appointment. From time to time the Board of
-----------
Directors by a resolution adopted by a majority of the entire Board
may appoint any committee or committees composed of two or more
members for any purpose or purposes, to the extent lawful, which shall
have powers as shall be determined and specified by the Board of
Directors in the resolution of appointment.
SECTION 2. Procedures, Quorum and Manner of Acting. Each
---------------------------------------
committee shall fix its own rules of procedure, and shall meet where
and as provided by such rules or by resolution of the
<PAGE>
Board of Directors. Except as otherwise provided by law, the presence
of a majority of the then appointed members of a committee shall
constitute a quorum for the transaction of business by that committee,
and in every case where a quorum is present the affirmative vote of a
majority of the members of the committee present shall be the act of
the committee. Each committee shall keep minutes of its proceedings,
and actions taken by a committee shall be reported to the Board of
Directors.
SECTION 3. Action by Written Consent. Any action required
-------------------------
or permitted to be taken at any meeting of any committee of the Board
of Directors may be taken without a meeting if all the members of the
committee consent thereto in writing, and the writing or writings are
filed with the minutes of proceedings of the committee.
SECTION 4. Term; Termination. In the event any person
-----------------
shall cease to be a director of the Corporation, such person shall
simultaneously therewith cease to be a member of any committee
appointed by the Board of Directors.
ARTICLE IV
Officers
--------
SECTION 1. Election and Qualifications. The Board of
---------------------------
Directors shall elect the officers of the Corporation, which shall
include a President and a Secretary, and may include, by election or
appointment, one or more Vice-Presidents (any one or more of whom may
be given an additional designation of rank or function), a Treasurer
and such assistant secretaries, such Assistant Treasurers and such
other officers as the Board may from time to time deem proper. Each
officer shall have such powers and duties as may be prescribed by
these By-laws and as may be assigned by the Board of Directors or the
President. Any two or more offices may be held by the same person.
SECTION 2. Term of Office and Remuneration. The term of
-------------------------------
office of all officers shall be one year and until their respective
successors have been elected and qualified, but any officer may be
removed from office, either with or without cause, at any time by the
Board of Directors. Any vacancy in any office arising from any cause
may be filled for the unexpired portion of the term by the Board of
Directors. The remuneration of all officers of the Corporation may be
fixed by the Board of Directors or in such manner as the Board of
Directors shall provide.
<PAGE>
SECTION 3. Resignation; Removal. Any officer may resign at
--------------------
any time upon written notice to the Corporation and such resignation
shall take effect upon receipt thereof by the Corporation, unless
otherwise specified in the resignation. Any officer shall be subject
to removal, with or without cause, at any time by vote of a majority
of the entire Board.
SECTION 4. Chairman of the Board. The Chairman of the
---------------------
Board of Directors, if there be one, shall preside at all meetings of
the Board of Directors and shall have such other powers and duties as
may from time to time be assigned by the Board of Directors.
SECTION 5. President and Chief Executive Officer. The
-------------------------------------
President shall be the chief executive officer of the Corporation, and
shall have such duties as customarily pertain to that office. The
President shall have general management and supervision of the
property, business and affairs of the Corporation and over its other
officers; may appoint and remove assistant officers and other agents
and employees; and may execute and deliver in the name of the
Corporation powers of attorney, contracts, bonds and other obligations
and instruments.
SECTION 6. Vice-President. A Vice-President may execute
--------------
and deliver in the name of the Corporation contracts and other
obligations and instruments pertaining to the regular course of the
duties of said office, and shall have such other authority as from
time to time may be assigned by the Board of Directors or the
President.
SECTION 7. Treasurer. The Treasurer shall in general have
---------
all duties incident to the position of Treasurer and such other duties
as may be assigned by the Board of Directors or the President.
SECTION 8. Secretary. The Secretary shall in general have
---------
all the duties incident to the office of Secretary and such other
duties as may be assigned by the Board of Directors or the President.
SECTION 9. Assistant Officers. Any assistant officer shall
------------------
have such powers and duties of the officer such assistant officer
assists as such officer or the Board of Directors shall from time to
time prescribe.
<PAGE>
ARTICLE V
Books and Records
-----------------
SECTION 1. Location. The books and records of the
--------
Corporation may be kept at such place or places within or outside the
State of Utah as the Board of Directors or the respective officers in
charge thereof may from time to time determine. The record books
containing the names and addresses of all shareholders, the number and
class of shares held by each and the dates when they respectively
became the owners of record thereof shall be kept by the Secretary as
prescribed in the By-laws and by such officer or agent as shall be
designated by the Board of Directors.
A corporation shall keep a copy of the following records at
its principal office: its articles of incorporation currently in
effect; its bylaws currently in effect; the minutes of all
shareholders' meetings, and records of all action taken by
shareholders without a meeting, for the past three years; all written
communications within the past three years to shareholders as a group
or to the holders of any class or series of shares as a group a list
of the names and business addresses of its current officers and
directors; its most recent annual report; and all financial statements
prepared for periods ending during the last three years.
SECTION 2. Addresses of Shareholders. Notices of meetings
-------------------------
and all other corporate notices may be delivered personally or mailed
to each shareholder at the shareholder's address as it appears on the
records of the Corporation.
SECTION 3. Fixing Date for Determination of Shareholders of
------------------------------------------------
Record. (a) In order that the Corporation may determine the
------
shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment thereof, the Board of Directors may
fix a record date which record date shall not be more than 70 nor less
than 10 days before the date of such meeting. If no record date is
fixed by the Board of Directors, the record date for determining
shareholders entitled to notice of or to vote at a meeting of
shareholders shall be at the close of business on the day preceding
the day on which notice is first given, or, if notice is waived, at
the close of business on the day next preceding the day on which the
meeting is held. A determination of shareholders of record entitled
to notice of or to vote at a meeting of shareholders shall apply to
any adjournment of the meeting; provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting,
<PAGE>
which it must do if the new record date is more than 120 days after
the date fixed for the original meeting.
(b) In order that the Corporation may determine the
shareholders entitled to consent to corporate action in writing
without a meeting, the Board of Directors may fix a record date, which
record date shall not precede the date upon which the resolution
fixing the record date is adopted by the Board of Directors and which
date shall not be more than 10 days after the date upon which the
resolution fixing the record date is adopted by the Board of
Directors. If no record date has been fixed by the Board of
Directors, the record date for determining shareholders entitled to
consent to corporate action in writing without a meeting, when no
prior action by the Board of Directors is required, shall be the first
date on which a signed written consent setting forth the action taken
or proposed to be taken is delivered to the Corporation by delivery to
its registered office in this State, its principal place of business,
or an officer or agent of the Corporation having custody of the book
in which proceedings of meetings of shareholders are recorded.
Delivery made to the Corporation's registered office shall be by hand
or by certified or registered mail, return receipt requested. If no
record date has been fixed by the Board of Directors and prior action
by the Board of Directors is required by this chapter, the record date
for determining shareholders entitled to consent to corporate action
in writing without a meeting shall be at the close of business on the
day on which the Board of Directors adopts the resolution taking such
prior action.
(c) In order that the Corporation may determine the
shareholders entitled to receive payment of any dividend or other
distribution or allotment of any rights or the shareholders entitled
to exercise any rights in respect of any change, conversion or
exchange of shares, or for the purpose of any other lawful action, the
Board of Directors may fix a record date which record date shall be
not more than 70 days prior to such action. If no record date is
fixed, the record date for determining shareholders for any such pur-
pose shall be at the close of business on the day on which the Board
of Directors adopts the resolution relating thereto.
ARTICLE VI
Certificates Representing Shares
--------------------------------
SECTION 1. Certificates; Signatures. The shares of the
------------------------
Corporation may but need not be represented by certificates.
<PAGE>
The Board of Directors of the Corporation may provide by resolution or
resolutions that some or all of any or all classes or series of its
shares shall be uncertificated shares. Any such resolution shall not
apply to shares represented by a certificate until such certificate is
surrendered to the Corporation. Every holder of shares represented by
certificates shall be entitled to have a certificate, signed by or in
the name of the Corporation by the Chairman or Vice-Chairman of the
Board of Directors, or the President or Vice-President, and by the
Treasurer or an Assistant Treasurer, or the Secretary or an Assistant
Secretary of the Corporation, representing the number of shares
registered in certificate form. Any and all signatures on any such
certificate may be facsimiles if the certificate is countersigned by a
transfer agent or registered by a registrar. In case any officer,
transfer agent or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be
such officer, transfer agent or registrar before such certificate is
issued, it may be issued by the Corporation with the same effect as if
he were such officer, transfer agent or registrar at the date of
issue. The name of the holder of record of the shares represented
thereby, with the number of such shares and the date of issue, shall
be entered on the books of the Corporation.
SECTION 2. Transfers of Shares. Upon compliance with
-------------------
provisions restricting the transfer or registration of transfer of
shares, if any, shares shall be transferable on the books of the
Corporation only by the holder of record thereof in person, or by duly
authorized attorney, upon surrender and cancellation of certificates
for a like number of shares, properly endorsed, and the payment of all
taxes due thereon.
SECTION 3. Fractional Shares. The Corporation may, but
-----------------
shall not be required to, issue certificates for fractions of a share
where necessary to effect authorized transactions, or the Corporation
may pay in cash the fair value of fractions of a share as of the time
when those entitled to receive such fractions are determined, or it
may issue scrip in registered or bearer form over the manual or
facsimile signature of an officer of the Corporation or of its agent,
exchangeable as therein provided for full shares, but such scrip shall
not entitle the holder to any rights of a shareholder except as
therein provided.
The Board of Directors shall have power and authority to
make all such rules and regulations as it may deem expedient
concerning the issue, transfer and registration of certificates
representing shares of the Corporation.
<PAGE>
SECTION 4. Lost, Stolen or Destroyed Certificates. The
--------------------------------------
Corporation may issue a new certificate of shares in place of any
certificate, theretofore issued by it, alleged to have been lost,
stolen or destroyed, and the Board of Directors may require the owner
of any lost, stolen or destroyed certificate, or his legal
representative, to give the Corporation a bond sufficient to indemnify
the Corporation against any claim that may be made against it on
account of the alleged loss, theft or destruction of any such
certificate or the issuance of any such new certificate.
ARTICLE VII
Dividends
---------
Subject always to the provisions of law and the Articles of
Incorporation, the Board of Directors shall have full power to
determine whether any, and, if any, what part of any, funds legally
available for the payment of dividends shall be declared as dividends
and paid to shareholders; the division of the whole or any part of
such funds of the Corporation shall rest wholly within the lawful dis-
cretion of the Board of Directors, and it shall not be required at any
time, against such discretion, to divide or pay any part of such funds
among or to the shareholders as dividends or otherwise; and before
payment of any dividend, there may be set aside out of any funds of
the Corporation available for dividends such sum or sums as the Board
of Directors from time to time, in its absolute discretion, thinks
proper as a reserve or reserves to meet contingencies, or for equal-
izing dividends, or for repairing or maintaining any property of the
Corporation, or for such other purpose as the Board of Directors shall
think conducive to the interest of the Corporation, and the Board of
Directors may modify or abolish any such reserve in the manner in
which it was created.
ARTICLE VIII
Ratification
------------
Any transaction, questioned in any law suit on the ground of
lack of authority, defective or irregular execution, adverse interest
of director, officer or shareholder, non-disclosure, miscomputation,
or the application of improper principles or practices of accounting,
may be ratified before or after judgment, by the Board of Directors or
by the shareholders, and if so ratified shall have the same force and
effect as if the
<PAGE>
questioned transaction had been originally duly authorized. Such
ratification shall be binding upon the Corporation and its
shareholders and shall constitute a bar to any claim or execution of
any judgment in respect of such questioned transaction.
ARTICLE IX
Corporate Seal
--------------
The corporate seal shall have inscribed thereon the name of
the Corporation and the year of its incorporation, and shall be in
such form and contain such other words and/or figures as the Board of
Directors shall determine. The corporate seal may be used by
printing, engraving, lithographing, stamping or otherwise making,
placing or affixing, or causing to be printed, engraved, lithographed,
stamped or otherwise made, placed or affixed, upon any paper or
document, by any process whatsoever, an impression, facsimile or other
reproduction of said corporate seal.
ARTICLE X
Fiscal Year
-----------
The fiscal year of the Corporation shall be fixed, and shall
be subject to change, by the Board of Directors. Unless otherwise
fixed by the Board of Directors, the fiscal year of the Corporation
shall be the calendar year.
ARTICLE XI
Waiver of Notice
----------------
Whenever notice is required to be given by these By-laws or
by the Articles of Incorporation or by law, a written waiver thereof,
signed by the person or persons entitled to said notice, whether
before or after the time stated therein, shall be deemed equivalent to
notice.
<PAGE>
ARTICLE XII
Bank Accounts, Drafts, Contracts, Etc.
--------------------------------------
SECTION 1. Bank Accounts and Drafts. In addition to such
------------------------
bank accounts as may be authorized by the Board of Directors, the
primary financial officer or any person designated by said primary
financial officer, whether or not an employee of the Corporation, may
authorize such bank accounts to be opened or maintained in the name
and on behalf of the Corporation as he may deem necessary or
appropriate, payments from such bank accounts to be made upon and
according to the check of the Corporation in accordance with the
written instructions of said primary financial officer, or other
person so designated by the Treasurer.
SECTION 2. Contracts. The Board of Directors may authorize
---------
any person or persons, in the name and on behalf of the Corporation,
to enter into or execute and deliver any and all deeds, bonds,
mortgages, contracts and other obligations or instruments, and such
authority may be general or confined to specific instances.
SECTION 3. Proxies; Powers of Attorney; Other Instruments.
---------------------------------- -----------
The Chairman, the President or any other person designated by either
of them shall have the power and authority to execute and deliver
proxies, powers of attorney and other instruments on behalf of the
Corporation in connection with the rights and powers incident to the
ownership of shares by the Corporation. The Chairman, the President
or any other person authorized by proxy or power of attorney executed
and delivered by either of them on behalf of the Corporation may
attend and vote at any meeting of shareholders of any company in which
the Corporation may hold shares, and may exercise on behalf of the
Corporation any and all of the rights and powers incident to the
ownership of such shares at any such meeting, or otherwise as
specified in the proxy or power of attorney so authorizing any such
person. The Board of Directors, from time to time, may confer like
powers upon any other person.
SECTION 4. Financial Reports. The Board of Directors may
-----------------
appoint the primary financial officer or other fiscal officer [and/or
the Secretary] [or any other officer] to cause to be prepared and
furnished to shareholders entitled thereto any special financial
notice and/or financial statement, as the case may be, which may be
required by any provision of law.
<PAGE>
ARTICLE XIII
Indemnification
---------------
The Corporation shall indemnify, to the full extent
permitted by the Utah Business Corporation Act, as amended from time
to time, all persons whom it is permitted to indemnify pursuant
thereto.
ARTICLE XIV
Amendments
----------
The Board of Directors shall have power to adopt, amend or
repeal By-laws. By-laws adopted by the Board of Directors may be
repealed or changed, and new By-laws made, by the shareholders, and
the shareholders may prescribe that any By-law made by them shall not
be altered, amended or repealed by the Board of Directors.
NYFS06...:\47\41847\0008\1710\EXHD126P.200
Exhibit 3.2(j)(i)
<PAGE>
BYLAWS OF
MMC OF WASHINGTON, INC.
ARTICLE I
OFFICES
-------
The principal office of the corporation shall be located at
its principal place of business or such other place as the Board of
Directors (the "Board") may designate. The corporation may have such
other offices, either within or without the State of Washington, as
the Board may designate or as the business of the corporation may
require from time to time.
ARTICLE II
SHAREHOLDERS
------------
2.1 Annual Meeting. The annual meeting of the shareholders
--------------
shall be held on the third Tuesday in August of each year at 10:00 am,
for the purpose of electing directors and officers and transacting
such business as may properly come before the meeting. If the day
fixed for the annual meeting is a legal holiday at the place of the
meeting, the meeting shall be held on the next succeeding business
day. If the annual meeting is not held on the date designated
therefor, the Board shall cause the meeting to be held as soon
thereafter as may be convenient.
2.2 Special Meetings. The President, the Board, or the
----------------
holders of not less than one-fifth of all the outstanding shares of
the corporation entitled to vote at the meeting may call special
meetings of the shareholders for any purpose.
2.3 Meetings by Telephone. Shareholders may participate in
---------------------
a meeting of the shareholders by means of a conference telephone or
similar communications equipment by means of which all persons
participating in the meeting can hear each other at the same time.
Participation by such means shall constitute presence in person at a
meeting.
2.4 Place of Meeting. All meetings shall be held at the
----------------
principal office of the corporation or at such other place within or
without the State of Washington designated by the Board, by any
persons entitled to call a meeting or by a waiver of notice signed by
all of the shareholders entitled to vote at the meeting.
2.5 Notice of Meeting. The President, the Secretary, the
-----------------
Board, or shareholders calling an annual or special meeting of
shareholders as provided for herein, shall cause to be delivered to
each shareholder entitled to notice of or to vote at the meeting
either personally or by mail or facsimile transmission, not less than
ten (10) nor more than fifty (50) days before the meeting, written
notice stating the place, day and hour of the meeting and, in the case
of a special meeting, the purpose or purposes for which the meeting is
called. At any time, upon written request of the holders of not less
than one-sixth of all of the outstanding shares of the corporation
entitled to vote at the meeting, it shall be the duty of the Secretary
to give notice of a special meeting of shareholders to be held on such
date and at such place and time as the Secretary may fix, not less
than ten (10) nor more than thirty-five (35)
<PAGE>
days after receipt of said request, and if the Secretary shall neglect
or refuse to issue such notice, the person making the request may do
so and may fix the date for such meeting. If such notice is mailed, it
shall be deemed delivered when deposited in the official government
mail properly addressed to the shareholder at his or her address as it
appears on the stock transfer books of the corporation with postage
prepaid. If the notice is telegraphed, it shall be deemed delivered
when the telegram is delivered to the telegraph company. If the
notice is transmitted by facsimile, it shall be deemed delivered when
received.
2.6 Waiver of Notice. Whenever any notice is required to
----------------
be given to any shareholder under the provisions of these Bylaws, the
Articles of Incorporation or the Washington Business Corporation Act,
a waiver thereof in writing, signed by the person or persons entitled
to such notice, whether before or after the time stated therein, shall
be deemed equivalent to the giving of such notice.
2.7 Fixing of Record Date for Determining Shareholders.
--------------------------------------------------
For the purpose of determining shareholders entitled to notice of, or
to vote at, any meeting of shareholders or any adjournment thereof, or
shareholders entitled to receive payment of any dividend, or in order
to make a determination of shareholders for any other purpose, the
Board may fix in advance a date as the record date for any such
determination. Such record date shall be not more than fifty (50)
days, and in case of a meeting of shareholders, not less than ten (10)
days prior to the date on which the particular action requiring such
determination is to be taken. If no record date is fixed for the
determination of shareholders entitled to vote at a meeting or to
receive payment of a dividend, the date and hour on which the notice
of meeting is mailed or on which the resolution of the Board declaring
such dividend is adopted, as the case may be, shall be the record date
and time for such determination. Such a determination shall apply to
any adjournment of the meeting.
2.8 Voting Record. At least ten (10) days before each
-------------
meeting of shareholders, a complete record of the shareholders
entitled to vote at such meeting, or any adjournment thereof, shall be
made, arranged in alphabetical order, with the address of and number
of shares held by each shareholder. This record shall be kept on file
at the registered office of the corporation for ten (10) days prior to
such meeting and shall be kept open at such meeting for the inspection
of any shareholder.
2.9 Quorum. A majority of the outstanding shares of the
------
corporation entitled to vote, represented in person or by
<PAGE>
proxy, shall constitute a quorum at a meeting of the shareholders. If
less than one hundred percent of the outstanding shares entitled to
vote are represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further
notice. If a quorum is present or represented at a reconvened meeting
following such an adjournment, any business may be transacted that
might have been transacted at the meeting as originally called.
2.10 Manner of Acting. If a quorum is present, the
----------------
affirmative vote of a majority of the shares represented at the
meeting and entitled to vote on the subject matter shall be the act of
the shareholders, unless the vote of a greater number is required by
these Bylaws, the Articles of Incorporation or the Washington Business
Corporation Act.
2.11 Proxies. A shareholder may vote by proxy executed in
-------
writing by the shareholder or by his or her attorney- in-fact. Such
proxy shall be filed with the Secretary of the corporation before or
at the time of the meeting. A proxy shall become invalid eleven
months after the date of its execution, unless otherwise provided in
the proxy, A proxy with respect to a specified meeting shall entitle
the holder thereof to vote at any reconvened meeting following
adjournment of such meeting but shall not be valid after the final
adjournment thereof.
2.12 Voting of Shares. Each outstanding share entitled to
----------------
vote with respect to the subject matter of an issue submitted to a
meeting of shareholders shall be entitled to one vote upon each such
issue.
2.13 Voting for Directors. Each shareholder entitled to
--------------------
vote at an election of directors may vote, in person or by proxy, the
number of shares owned by such shareholder for as many persons as
there are directors to be elected and for whose election such
shareholder has a right to vote, or, unless otherwise provided in the
Articles of Incorporation, each such shareholder may cumulate his or
her votes by distributing among one or more candidates as many votes
as are equal to the number of such directors multiplied by the number
of his or her shares.
2.14 Action by Shareholders Without a Meeting. Any action
----------------------------------------
which could be taken at a meeting of the shareholders may be taken
without a meeting if a written consent setting forth the action so
taken is signed by all shareholders entitled to vote with respect to
the subject matter thereof. Any such consent shall be inserted in the
minute book as if it were the minutes of a meeting of the
shareholders.
<PAGE>
ARTICLE III
BOARD OF DIRECTORS
------------------
3.1 General Powers. All corporate powers shall be
--------------
exercised by or under the authority of, and the business and affairs
of the corporation shall be managed under the direction of, the Board,
except as may be otherwise provided in these Bylaws, the Articles of
Incorporation or the Washington Business Corporation Act.
3.2 Number and Tenure. The Board shall be composed of two
-----------------
(2) directors. The number of directors may be changed from time to
time by action of the shareholders, but no decrease in the number of
directors shall have the effect of shortening the term of any
incumbent director. Unless a director dies, resigns, or is removed,
he or she shall hold office until the next annual meeting of
shareholders or until his or her successor is elected, whichever is
later. Directors need not be shareholders of the corporation or
residents of the State of Washington.
3.3 Annual and Regular Meetings. An annual Board meeting
---------------------------
shall be held without notice immediately after and at the same place
as the annual meeting of shareholders. A resolution of the Board, or
any committee thereof, may specify the time and place either within or
without the State of Washington for holding regular meetings thereof
without other notice than such resolution.
3.4 Special Meetings. Special meetings of the Board or
-----------------
any committee appointed by the Board may be called by or at the
request of the Chairman of the Board, the President, the Secretary or
any one director. The person or persons authorized to call special
meetings may fix any place either within or without the State of
Washington as the place for holding any special Board meeting called
by them.
3.5 Meetings by Telephone. Members of the Board or any
---------------------
committee designated by the Board may participate in a meeting of such
Board or committee by means of a conference telephone or similar
communications equipment by means of which all persons participating
in the meeting can hear each other at the same time. Participation by
such means shall constitute presence in person at a meeting.
3.6 Notice of Special Meetings. Written notice of a
--------------------------
special Board or committee meeting stating the place, day and hour of
the meeting shall be given to a director at his or her address shown
on the records of the corporation. Neither the
<PAGE>
business to be transacted at, nor the purpose of, any special meeting
need be specified in the notice of such meeting.
3.6.1 Personal Delivery. If delivery is by
-----------------
personal service, the notice shall be effective if delivered at such
address at least two (2) days before the meeting.
3.6.2 Delivery by Mail. If notice is delivered by
----------------
mail, the notice shall be deemed effective if deposited in the
official government mail properly addressed with postage pre-paid at
least five (5) days before the meeting.
3.6.3 Delivery by Telex or Facsimile. If notice is
------------------------------
delivered by telex or facsimile, the notice shall be deemed effective
if sent and evidenced by transmission receipt or report at least three
(3) days before the meeting.
3.7 Waiver of Notice.
----------------
3.7.1 In Writing. Whenever any notice is required
----------
to be given to any director under the provisions of these Bylaws, the
Articles of Incorporation or the Washington Business Corporation Act,
a waiver thereof in writing, signed by the person or persons entitled
to such notice, whether before or after the time stated therein, shall
be deemed equivalent to the giving of such notice. Neither the
business to be transacted at, nor the purpose of, any regular or
special meeting of the Board need be specified in the waiver of notice
of such meeting.
3.7.2 By Attendance. The attendance of a director
-------------
at a Board or committee meeting shall constitute a waiver of notice of
such meeting, except where a director attends a meeting for the
express purpose of objecting to the transaction of any business
because the meeting is not lawfully called or convened.
3.8 Quorum. A majority of the directors shall constitute a
------
quorum for the transaction of business at any Board meeting. A
majority of the directors present may adjourn the meeting from time to
time without further notice.
3.9 Manner of Acting. The act of the majority of the
----------------
directors present at a Board or committee meeting at which there is a
quorum shall be the act of the Board or of such committee, unless the
vote of a greater number is required by these Bylaws, the Articles of
Incorporation, or the Washington Business Corporation Act.
<PAGE>
3.10 Presumption of Assent. A director of the corporation
---------------------
present at a Board or committee meeting at which action on any
corporate matter is taken shall be presumed to have assented to the
action taken unless his or her dissent is entered in the minutes of
the meeting, or unless such director files a written dissent to such
action with the person acting as the secretary of the meeting before
the adjournment thereof, or forwards such dissent by registered mail
to the Secretary of the corporation immediately after the adjournment
of the meeting. A director who voted in favor of such action may not
dissent.
3.11 Action by Board or Committees Without a Meeting. Any
-----------------------------------------------
action which could be taken at a meeting of the Board or of any
committee appointed by the Board may be taken without a meeting if a
written consent setting forth the action so taken is signed by each of
the directors or by each committee member. Any such written consent
shall be inserted in the minute book as if it were the minutes of a
Board or a committee meeting.
3.12 Resignation. Any director may resign at any time by
-----------
delivering written notice to the Chairman of the Board, the President,
the Secretary or the Board, or to the registered office of the
corporation, or by giving oral notice at any meeting of the directors
or shareholders. Any such resignation shall take effect at the time
specified therein, or if the time is not specified, upon delivery
thereof and, unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.
3.13 Removal. At a meeting of shareholders called
-------
expressly for that purpose, one or more members of the Board
(including the entire Board) may be removed, with or without cause, by
a vote of the holders of a majority of the shares then entitled to
vote on the election of directors. If the Articles of Incorporation
permit cumulative voting in the election of directors, and if less
than the entire Board is to be removed, no one of the directors may be
removed if the votes cast against his or her removal would be
sufficient to elect such director if then cumulatively voted at an
election of the entire Board.
3.14 Vacancies. Any vacancy occurring on the Board may be
---------
filled by the affirmative vote of all of the remaining directors
though less than a quorum of the Board. A director elected to fill a
vacancy shall be elected for the unexpired term of his or her
predecessor in office. Any directorship to be filled by reason of an
increase in the number of directors may be filled by the Board for a
term of office continuing only until the next election of directors by
the shareholders.
<PAGE>
3.15 Compensation. By Board resolution, directors may be
------------
paid their expenses, if any, of attendance at each Board meeting, or a
fixed sum for attendance at each Board meeting, or a stated salary as
a director, or a combination of the foregoing. No such payment shall
preclude any director from serving the corporation in any other
capacity and receiving compensation therefor.
ARTICLE IV
OFFICERS
--------
4.1 Number. The officers of the corporation shall be a
------
President and a Secretary, each of whom shall be elected by the Board.
The Board may also elect a Vice President and a Treasurer, as well as
other officers and assistant officers, including a Chairman of the
Board as may be elected or appointed by the Board, such officers and
assistant officers to hold office for such period, have such authority
and perform such duties as are provided in these Bylaws or as may be
provided by resolution of the Board. Any officer may be assigned by
the Board any additional title that the Board deems appropriate. The
Board may delegate to any officer or agent the power to appoint any
such subordinate officers or agents and to prescribe their respective
terms of office, authority and duties. Any two or more offices may be
held by the same person.
4.2 Election and Term of Office. The officers of the
---------------------------
corporation shall be elected annually by the Board at the Board
meeting held after the annual meeting of the shareholders. If the
election of officers is not held at such meeting, such election shall
be held as soon thereafter as a Board meeting conveniently may be
held. Unless an officer dies, resigns, or is removed from office, he
or she shall hold office until the next annual meeting of the Board or
until his or her successor is elected.
4.3 Resignation. Any officer may resign at any time by
-----------
delivering written notice to the Chairman of the Board, the President,
a Vice President, the Secretary or the Board, or by giving oral notice
at any meeting of the Board. Any such resignation shall take effect at
the time specified therein, or if the time is not specified, upon
delivery thereof and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it
effective.
4.4 Removal. Any officer or agent elected or appointed by
-------
the Board may be removed by the Board whenever in its judgment the
best interests of the corporation would be
<PAGE>
served thereby, but such removal shall be without prejudice to the
contract rights, if any, of the person so removed.
4.5 Vacancies. A vacancy in any office created by the
---------
death, resignation, removal, disqualification, creation of a new
office or any other cause may be filled by the Board for the unexpired
portion of the term or for a new term established by the Board.
4.6 President. The President shall preside over meetings
---------
of the Board and shareholders and, subject to the Board's control,
shall supervise and control all of the assets, business and affairs of
the corporation. The President may sign certificates for shares of
the corporation, deeds, mortgages, bonds, contracts, or other
instruments, except when the signing and execution thereof have been
expressly delegated by the Board or by these Bylaws to some other
officer or agent of the corporation or are required by law to be
otherwise signed or executed by some other officer or in some other
manner. In general, the President shall perform all duties incident
to the office of President, and such other duties as are prescribed by
the Board from time to time.
4.7 Vice President. Except as otherwise provided herein,
--------------
in the absence of the President or his inability to act, the senior
Vice President shall act in his place and stead and shall have all the
powers and authority of the President, except as limited by resolution
of the Board of Directors.
4.8 Secretary. The Secretary shall: (a) keep the minutes
---------
of meetings of the shareholders and the Board in one or more books
provided for that purpose; (b) see that all notices are duly given in
accordance with the provisions of these Bylaws or as required by law;
(c) be custodian of the corporate records of the corporation; (d) keep
registers of the post office address of each shareholder and Director;
(e) sign certificates for shares of the corporation; (f) have general
charge of the stock transfer books of the corporation; (g) sign, with
the President, or other officer authorized by the President or the
Board, deeds, mortgages, bonds, contracts, or other instruments; and
(h) in general perform all duties incident to the office of Secretary
and such other duties as from time to time may be assigned to him or
her by the President or by the Board. In the absence of the
Secretary, an Assistant Secretary may perform the duties of the
Secretary.
4.9 Treasurer. The Treasurer shall have the custody of the
---------
corporate funds and securities and shall keep full and
<PAGE>
accurate account of receipts and disbursements in books belonging to
the corporation. He shall deposit all monies and other valuables in
the name and to the credit of the corporation in such depositories as
may be designated by the Board of Directors. The Treasurer shall
disburse the funds of the corporation as may be ordered by the Board
of Directors, the Chairman of the board (if there is one), or the
President, taking proper vouchers for such disbursements. He shall
render to the Chairman of the board (if there is one), the President
and the Board of Directors at the regular meetings of the Board of
Directors, or whenever they may request it, and to the shareholders at
the annual meeting of the shareholders, an account of all his
transactions as treasurer and of the financial condition of the
corporation. If required by the Board of Directors he shall give the
corporation a bond for the faithful discharge of his duties in such
amount and with such surety as the board shall prescribe. The
Treasurer shall also perform such other duties as may be assigned to
him by the Chairman of the board (if there is one), the President or
the Board of Directors.
ARTICLE V
CONTRACTS, LOANS, CHECKS AND DEPOSITS
-------------------------------------
5.1 Contracts. The Board may authorize any officer or
---------
officers, or agent or agents, to enter into any contract or execute
and deliver any instrument in the name of and on behalf of the
corporation. Such authority may be general or confined to specific
instances.
5.2 Loans. No loans shall be contracted on behalf of the
-----
corporation and no evidences of indebtedness shall be issued in its
name unless authorized by a resolution of the Board. Such authority
may be general or confined to specific instances. No loans shall be
made by the corporation secured by its shares.
5.3 Loans to Officers and Directors. No loans shall be
-------------------------------
made by the corporation to its officers or directors, unless first
approved by the holders of at least two-thirds of the outstanding
shares.
5.4 Checks, Drafts, etc. All checks, drafts or other
-------------------
orders for the payment of money, notes or other evidences of
indebtedness issued in the name of the corporation shall be signed by
such officer or officers, or agent or agents, of the corporation and
in such manner as is from time to time determined by resolution of the
Board.
<PAGE>
5.5 Deposits. All funds of the corporation not otherwise
--------
employed shall be deposited from time to time to the credit of the
corporation in such banks, trust companies or other depositories as
the Board may select.
ARTICLE VI
CERTIFICATES FOR SHARES AND THEIR TRANSFER
------------------------------------------
6.1 Issuance of Shares. No shares of the corporation shall
------------------
be issued unless authorized by the Board, which authorization shall
include the maximum number of shares to be issued and the
consideration to be received for each share.
6.2 Certificates for Shares. Certificates representing
-----------------------
shares of the corporation shall be signed by the President and shall
include on their face written notice of any restrictions which may be
imposed on the transferability of such shares. All certificates shall
be consecutively numbered or otherwise identified.
6.3 Stock Records. The stock transfer books shall be kept
-------------
at the registered office or principal place of business of the
corporation or at the office of the corporation's transfer agent or
registrar. The name and address of the person to whom the shares
represented thereby are issued, together with the class, number of
shares and date of issue, shall be entered on the stock transfer books
of the corporation. The person in whose name shares stand on the
books of the corporation shall be deemed by the corporation to be the
owner thereof for all purposes.
6.4 Restrictions on Transfer. Except to the extent that
------------------------
the corporation has obtained an opinion of counsel acceptable to the
corporation that transfer restrictions are not required under
applicable securities laws, all certificates representing shares of
the corporation shall bear the following legend on the face of the
certificate or on the reverse of the certificate if the reference to
the legend is contained on the face:
The securities evidenced by this Certificate have not been
registered under the Securities Act of 1933 or any applicable
state law, and no interest therein may be sold, distributed,
assigned, offered, pledged or otherwise transferred unless (a)
there is an effective registration statement under such Act and
applicable state securities laws covering any such transaction
involving said securities or (b) this corporation receives an
opinion of legal counsel for the holder of these securities
(concurred in by legal
<PAGE>
counsel for this corporation) stating that such transaction is
exempt from registration or (c) this corporation otherwise
satisfies itself that such transaction is exempt from
registration.
6.5 Transfer of Shares. The transfer of shares of the
------------------
corporation shall be made only on the stock transfer books of the
corporation pursuant to authorization or document of transfer made by
the holder of record thereof or by his or her legal representative,
who shall furnish proper evidence of authority to transfer, or by his
or her attorney-in-fact authorized by power of attorney duly executed
and filed with the Secretary of the corporation. All certificates
surrendered to the corporation for transfer shall be canceled and no
new certificate shall be issued until the former certificates for a
like number of shares shall have been surrendered and canceled.
6.6 Lost or Destroyed Certificates. In the case of a lost,
------------------------------
destroyed or mutilated certificate, a new certificate may be issued
therefor upon such terms and indemnity to the corporation as the Board
may prescribe.
ARTICLE VII
BOOKS AND RECORDS
-----------------
The corporation shall keep correct and complete books and
records of account, stock transfer books, minutes of the proceedings
of its shareholders and Board and such other records as may be
necessary or advisable.
ARTICLE VIII
ACCOUNTING YEAR
---------------
The accounting year of the corporation shall be the calendar
year, provided that if a different accounting year is at any time
selected for purposes of federal income taxes, the accounting year
shall be the year so selected.
ARTICLE IX
SEAL
----
The seal of the corporation shall consist of the name of the
corporation, the state of its incorporation and the year of its
incorporation.
<PAGE>
ARTICLE X
INDEMNIFICATION
---------------
To the full extent permitted by the Washington Business
Corporation Act, the corporation shall indemnify any person made or
threatened to be made a party to any proceeding (whether brought by or
in the right of the corporation or otherwise) by reason of the fact
that he or she is or was a director or officer of the corporation, or
is or was serving at the request of the corporation as a director or
officer of another corporation against judgments, penalties, fines,
settlements and reasonable expenses (including attorneys' fees),
actually incurred by him or her in connection with such proceeding;
and the Board may, at any time, approve indemnification of any other
person which the corporation has the power to indemnify under the
Washington Business Corporation Act. The indemnification provided by
this Article shall not be deemed exclusive of any other rights to
which a person may be entitled as a matter of law or by contract or by
vote of the Board or its shareholders. The corporation may purchase
and maintain indemnification insurance for any person to the extent
provided by applicable law. Any indemnification of a Director
pursuant to this article, including any payment or reimbursement of
expenses, shall be reported to the shareholders with the notice of the
next meeting of shareholders or prior thereto in a written report
containing a brief description of the proceedings involving the
director being indemnified and the nature and extent of such
indemnification.
ARTICLE XI
AMENDMENTS
----------
These Bylaws may be altered, amended or repealed and new
Bylaws may be adopted by the Board. The shareholders may also alter,
amend and repeal these Bylaws or adopt new Bylaws. All Bylaws made by
the Board may be amended, repealed, altered or modified by the
shareholders.
<PAGE>
The foregoing Bylaws were adopted by the Board of Directors
on __________________________, 1994.
/s/ Donald Grayhardt
---------------------------
Donald Grayhardt, Secretary
NYFS06...:\47\41847\0008\1710\EXHD126J.440
Exhibit 3.2(k)(i)
<PAGE>
BY-LAWS
OF
CHECK MART OF WASHINGTON, D.C., INC.
(A DISTRICT OF COLUMBIA CORPORATION)
-----------
ARTICLE I
Shareholders
------------
SECTION 1. Annual Meeting. The annual meeting of share
--------------
holders for the election of directors and for the transaction of such
other business as may properly come before the meeting shall be held
at the office of the Corporation in the District of Columbia or at
such other place within or without the District of Columbia as may be
determined by the Board of Directors and as shall be designated in the
notice of said meeting, on such date and at such time as may be de-
termined by the Board of Directors.
SECTION 2. Special Meetings. Special meetings of the
----------------
shareholders for the transaction of such business as may properly come
before the meeting shall be held at the office of the Corporation in
the District of Columbia, or at such other place within or without the
District of Columbia as may be designated from time to time by the
Board of Directors. Whenever the Board of Directors shall fail to fix
such place, or whenever shareholders entitled to call a special
meeting shall call the same, the meeting shall be held at the office
of the Corporation in the District of Columbia. Special meetings of
the shareholders shall be held upon call of the Board of Directors or
of the President or any Vice-President or the Secretary or any
director, at such time as may be fixed by the Board of Directors or
the President or such Vice-President or the Secretary or such
director, as the case may be, and as shall be stated in the notice of
said meeting, except when the Business Corporation Act of the District
of Columbia (the "Business Corporation Law") confers upon the
shareholders the right to demand the call of such meeting and fix the
date thereof.
SECTION 3. Notice of Meetings. The notice of all meetings
------------------
of shareholders shall be in writing, shall state the place, date and
hour of the meeting and, unless it is the annual meeting, shall
indicate that it is being issued by or at the
<PAGE>
direction of the person or persons calling the meeting. The notice of
an annual meeting of shareholders shall state that the meeting is
called for the election of directors and for the transaction of such
other business as may properly come before the meeting and shall state
the purpose or purposes of the meeting if any other action is to be
taken at such annual meeting which could be taken at a special
meeting. The notice of a special meeting shall, in all instances,
state the purpose or purposes for which the meeting is called. A copy
of the notice of any meeting shall be served either personally or by
first class mail, in accordance with the provisions of the Business
Corporation Law, to each shareholder at such shareholder's record
address or at such other address as such shareholder may have
furnished by request in writing to the Secretary of the Corporation.
If a meeting is adjourned to another time or place and if any
announcement of the adjourned time or place is made at the meeting, it
shall not be necessary to give notice of the adjourned meeting unless
the Board of Directors, after adjournment, fixes a new record date for
the adjourned meeting. Notice of a meeting need not be given to any
shareholder who submits a signed waiver of notice before or after the
meeting. The attendance of a shareholder at a meeting without
protesting prior to the conclusion of the meeting the lack of notice
of such meeting shall constitute a waiver of notice by such
shareholder.
SECTION 4. Shareholder Lists. A list of shareholders as of
-----------------
the record date, certified by the corporate officer responsible for
its preparation, or by the transfer agent, if any, shall be produced
at any meeting of shareholders upon the request thereat or prior
thereto of any shareholder. If the right to vote at any meeting is
challenged, the inspectors of election, if any, or the person
presiding thereat, shall require such list of shareholders to be
produced as evidence of the right of the persons challenged to vote at
such meeting, and all persons who appear from such list to be
shareholders entitled to vote thereat may vote at such meeting.
SECTION 5. Quorum. Except as otherwise provided by law or
------
the Corporation's Articles of Incorporation, a quorum for the
transaction of business at any meeting of shareholders shall consist
of the holders of record of a majority of the issued and outstanding
shares of the capital stock of the Corporation entitled to vote at the
meeting, present in person or by proxy. At all meetings of the
shareholders at which a quorum is present, all matters, except as
otherwise provided by law, in Section 7 hereunder or in the Articles
of Incorporation, shall be decided by the vote of the holders of a
majority of the shares entitled
<PAGE>
to vote thereat, that are present in person or by proxy. If there be
no such quorum, the holders of a majority of such shares so present or
represented may adjourn the meeting from time to time, without further
notice, until a quorum shall have been obtained. When a quorum is
once present to organize a meeting, it is not broken by the subsequent
withdrawal of any shareholder.
SECTION 6. Organization. Meetings of shareholders shall be
------------
presided over by the Chairman, if any, or if none or in the Chairman's
absence the President, or if none or in the President's absence a
Vice-President, or, if none of the foregoing is present, by a chairman
to be chosen by the shareholders entitled to vote who are present in
person or by proxy at the meeting. The Secretary of the Corporation,
or in the Secretary's absence an Assistant Secretary, shall act as
secretary of every meeting, but if neither the Secretary nor an
Assistant Secretary is present, the presiding officer of the meeting
shall choose any person present to act as secretary of the meeting.
SECTION 7. Voting; Proxies; Required Vote; Ballots. At
---------------------------------------
each meeting of shareholders, every shareholder shall be entitled to
vote in person or by proxy appointed by instrument in writing,
subscribed by such shareholder or by such shareholder's duly
authorized attorney-in-fact, and shall have one vote for each share
entitled to vote and registered in such shareholder's name on the
books of the Corporation on the applicable record date fixed pursuant
to these By-laws. No proxy shall be valid after the expiration of 11
months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the shareholder
executing it, except as otherwise provided by the Business Corporation
Law. At all elections of directors the voting may but need not be by
ballot and a plurality of the votes cast thereat shall elect. Except
as otherwise required by law or the Articles of Incorporation, any
other action shall be authorized by a majority of the votes cast.
SECTION 8. Inspectors. The Board of Directors, in advance
----------
of any meeting, may appoint one or more inspectors to act at the
meeting or any adjournment thereof. If an inspector or inspectors are
not so appointed, the person presiding at the meeting may, and on the
request of any shareholder shall, appoint one or more inspectors. In
case any person appointed fails to appear or act, the vacancy may be
filled by appointment made by the Board of Directors in advance of the
meeting or at the meeting by the person presiding thereat. Each
inspector, if any, before entering upon the discharge of such
inspector's duties, shall take and sign an oath to execute faithfully
the duties of
<PAGE>
inspector at such meeting with strict impartiality and according to
the best of such inspector's ability. The inspectors, if any, shall
determine the number of shares outstanding and the voting power of
each, the shares represented at the meeting, the existence of a
quorum, and the validity and effect of proxies, and shall receive
votes, ballots or consents, hear and determine all challenges and
questions arising in connection with the right to vote, count and
tabulate all votes, ballots or consents, determine the result, and do
such acts as are proper to conduct the election or vote with fairness
to all shareholders. On request of the person presiding at the
meeting or any shareholder, the inspectors shall make a report in
writing of any challenge, question or matter determined by them and
execute a certificate as to any fact found by them.
SECTION 9. Actions Without Meetings. Whenever shareholders
------------------------
are required or permitted to take any action by vote, such action may
be taken without a meeting on written consent, setting forth the
action so taken, signed by the holders of all outstanding shares
entitled to vote thereon.
SECTION 10. Meaning of Certain Terms. As used herein in
------------------------
respect of the right to notice of a meeting of shareholders or a
waiver thereof or to participate or vote thereat or to consent or
dissent in writing in lieu of a meeting, as the case may be, the terms
"share" and "shareholder" or "shareholders" refer to an outstanding
share or shares and to a holder or holders of record of outstanding
shares, respectively, when the Corporation is authorized to issue only
one class of shares, and said references are also intended to include
any outstanding share or shares and any holder or holders of record of
outstanding shares of any class upon which or upon whom the Articles
of Incorporation confers such rights, where there are two or more
classes or series of shares, or upon which or upon whom the Business
Corporation Law confers such rights, notwithstanding that the Articles
of Incorporation may provide for more than one class or series of
shares, one or more of which are limited in or denied such rights
thereunder.
ARTICLE II
Board of Directors
------------------
SECTION 1. General Powers. The business, property and
--------------
affairs of the Corporation shall be managed by or under the direction
of its Board of Directors.
<PAGE>
SECTION 2. Qualification; Number; Term. (a) Each director
---------------------------
shall be at least 18 years of age. A director need not be a share-
holder, a citizen of the United States, or a resident of the District
of Columbia. The number of directors constituting the entire Board of
Directors shall be at least three, except that where all the shares
are owned beneficially and of record by fewer than three shareholders,
the number of directors may be less than three but not less than the
number of shareholders. Subject to the foregoing limitation and
except for the first Board of Directors, such number may be fixed from
time to time by action of the Board of Directors or of the share-
holders, or, if the number of directors is not so fixed, the number
shall be three. The number of directors may be increased or decreased
by action of the Board of Directors or shareholders, provided that any
action of the Board of Directors to effect such increase or decrease
shall require the vote of a majority of the entire Board of Directors.
The use of the phrase "entire Board of Directors" herein refers to the
total number of directors which the Corporation would have if there
were no vacancies.
(b) The first Board of Directors shall be elected by the
incorporator or incorporators of the Corporation and shall hold office
until the first annual meeting of shareholders or until their respec-
tive successors have been elected and qualified. Thereafter, direc-
tors who are elected at an annual meeting of shareholders, and
directors who are elected in the interim to fill vacancies and newly
created directorships, shall hold office until the next annual meeting
of shareholders or until their respective successors have been elected
and qualified. In the interim between annual meetings of shareholders
or special meetings of shareholders called for the election of
directors, newly created directorships and any vacancies in the Board
of Directors, including vacancies resulting from the removal of
directors for cause or without cause, may be filled by the vote of a
majority of the directors then in office, although less than a quorum
exists.
SECTION 3. Quorum and Manner of Voting. A majority of the
---------------------------
entire Board of Directors shall constitute a quorum for the transac-
tion of business. A majority of the directors present, whether or not
a quorum is present, may adjourn a meeting to another time and place.
Except as herein otherwise provided, the vote of a majority of the
directors present at the time of the vote, at a meeting duly
assembled, a quorum being present at such time, shall be the act of
the Board of Directors.
SECTION 4. Places of Meetings. Meetings of the Board of
------------------
Directors shall be held at such place within or without the
<PAGE>
District of Columbia as may from time to time be determined by the
Board of Directors, or as may be specified in the notice of the
meeting. Regular meetings of the Board of Directors shall be held at
such times and places as may from time to time be fixed by resolution
of the Board of Directors, and special meetings may be held at any
time and place upon the call of the Chairman of the Board, if any, or
of the President or any Vice-President or the Secretary or any
director by oral, telegraphic or notice duly served as set forth in
these By-laws.
SECTION 5. Annual Meeting. Following the annual meeting of
--------------
shareholders, the newly elected Board of Directors shall meet for the
purpose of the election of officers and the transaction of such other
business as may properly come before the meeting. Such meeting may be
held without notice immediately after the annual meeting of share-
holders at the same place at which such shareholders' meeting is held.
SECTION 6. Notice of Meetings. A notice of the place,
------------------
date, time and purpose or purposes of each meeting of the Board of
Directors shall be given to each director by mailing the same at least
two days before the meeting, or by telegraphing or telephoning the
same or by delivering the same personally not later than the day
before the day of the meeting. Notice need not be given of regular
meetings of the Board of Directors. Any requirements of furnishing a
notice shall be waived by any director who signs a waiver of notice
before or after the meeting, or who attends the meeting without
protesting, prior thereto or at its commencement, the lack of notice
to such director. The notice of any meeting need not specify the
purpose of the meeting, and any and all business may be transacted at
such meeting.
SECTION 7. Organization. At all meetings of the Board of
------------
Directors, the Chairman, if any, or if none or in the Chairman's
absence or inability to act the President, or in the President's
absence or inability to act any Vice-President who is a member of the
Board of Directors, or in such Vice-President's absence or inability
to act a chairman chosen by the directors, shall preside. The
Secretary of the Corporation shall act as secretary at all meetings of
the Board of Directors when present, and in the Secretary's absence,
the presiding officer may appoint any person to act as secretary.
SECTION 8. Resignation. Any director may resign at any
-----------
time upon written notice to the Corporation and such resignation shall
take effect upon receipt thereof by the President or Secretary, unless
otherwise specified in the resignation. Except
<PAGE>
as otherwise provided by law or by the Articles of Incorporation, any
or all of the directors may be removed, with or without cause, by the
holders of a majority of the shares of stock outstanding and entitled
to vote for the election of directors.
SECTION 9. Vacancies. Unless otherwise provided in these
---------
By-laws, vacancies among the directors, whether caused by resignation,
death, disqualification, removal, an increase in the authorized number
of directors or otherwise, may be filled by the affirmative vote of a
majority of the remaining directors, although less than a quorum, or
by a sole remaining director, or, at a special meeting of the share-
holders, by the holders of shares entitled to vote for the election of
directors.
SECTION 10. Actions by Written Consent. Any action
--------------------------
required or permitted to be taken by the Board of Directors or by any
committee thereof may be taken without a meeting if all members of the
Board of Directors or of any such committee consent in writing to the
adoption of a resolution authorizing the action and the writing or
writings are filed with the minutes of the proceedings of the Board of
Directors or of any such committee.
SECTION 11. Electronic Communication. Any one or more
------------------------
members of the Board of Directors or any committee thereof may
participate in a meeting of the Board of Directors or any such
committee by means of a conference telephone or similar communications
equipment allowing all persons participating in the meeting to hear
each other at the same time. Participation by such means shall
constitute presence in person at a meeting.
ARTICLE III
Committees of the Board of Directors
------------------------------------
SECTION 1. Appointment. From time to time the Board of
-----------
Directors by a resolution adopted by a majority of the whole Board may
appoint any committee or committees for any purpose or purposes, to
the extent lawful, which shall have powers as shall be determined and
specified by the Board of Directors in the resolution of appointment.
The Board of Directors shall have full power, at any time, to fill
vacancies in, to change membership of, to designate alternate members
of, or to discharge any such committee.
SECTION 2. Procedures, Quorum and Manner of Acting. Each
---------------------------------------
committee shall fix its own rules of procedure, and shall
<PAGE>
meet where and as provided by such rules or by resolution of the Board
of Directors. Except as otherwise provided by law, the presence of a
majority of the then appointed members of a committee shall constitute
a quorum for the transaction of business by that committee, and in
every case where a quorum is present the affirmative vote of a
majority of the members of the committee present shall be the act of
the committee. Each committee shall keep minutes of its proceedings,
and actions taken by a committee shall be reported to the Board of
Directors.
SECTION 3. Action by Written Consent. Any action required
-------------------------
or permitted to be taken at any meeting of any committee of the Board
may be taken without a meeting if all the members of the committee
consent thereto in writing, and the writing or writings are filed with
the minutes of proceedings of the committee.
SECTION 4. Term; Termination. In the event any person
-----------------
shall cease to be a director of the Corporation, such person shall
simultaneously therewith cease to be a member of any committee
appointed by the Board of Directors.
ARTICLE IV
Officers
--------
SECTION 1. Election and Qualifications. The Board of
---------------------------
Directors shall elect the officers of the Corporation, which shall
include a President and a Secretary, and may include, by election or
appointment, one or more Vice-Presidents (any one or more of whom may
be given an additional designation of rank or function), a Treasurer
and such other officers as the Board may from time to time deem
proper. Each officer shall have such powers and duties as may be
prescribed by these By-laws and as may be assigned by the Board of
Directors or the President. Any two or more offices may be held by
the same person. When all of the issued and outstanding stock of the
Corporation is owned by one person, such person may hold all or any
combination of offices.
SECTION 2. Term of Office and Remuneration. The term of
-------------------------------
office of all officers shall be one year and until their respective
successors have been elected and qualified, but any officer may be
removed from office, either with or without cause, at any time by the
Board of Directors. Any vacancy in any office arising from any cause
may be filled for the unexpired portion of the term by the Board of
Directors.
<PAGE>
SECTION 3. Resignation; Removal. Any officer may resign at
--------------------
any time upon written notice to the Corporation and such resignation
shall take effect upon receipt thereof by the President or Secretary,
unless otherwise specified in the resignation. Any officer shall be
subject to removal, with or without cause, at any time by vote of a
majority of the whole Board.
SECTION 4. Chairman of the Board. The Chairman of the
---------------------
Board of Directors, if there be one, shall preside at all meetings of
the Board of Directors and shall have such other powers and duties as
may from time to time be assigned by the Board of Directors.
SECTION 5. President. The President shall be the Chief
---------
Executive Officer of the Corporation and shall have general management
and supervision of the property, business and affairs of the Corpora-
tion and over its other officers. The President shall preside at all
meetings of the shareholders and, in the absence or disability of the
Chairman of the Board of Directors, or if there be no Chairman, shall
preside at all meetings of the Board of Directors. The President may
execute and deliver in the name of the Corporation powers of attorney,
contracts, bonds and other obligations and instruments, except in
cases where the signing and execution thereof shall be expressly
delegated by the Board of Directors, or by these By-laws, to some
other officer or agent of the Corporation.
SECTION 6. Vice-President. A Vice-President may execute
--------------
and deliver in the name of the Corporation contracts and other
obligations and instruments pertaining to the regular course of such
Vice-President's duties, and shall have such other authority as from
time to time may be assigned by the Board of Directors or the
President.
SECTION 7. Treasurer. The Treasurer shall in general have
---------
all duties incident to the position of Treasurer and such other duties
as may be assigned by the Board of Directors or the President.
SECTION 8. Secretary. The Secretary shall in general have
---------
all the duties incident to the office of Secretary and such other
duties as may be assigned by the Board of Directors or the President.
SECTION 9. Assistant Officers. Any assistant officer shall
------------------
have such powers and duties of the officer such assistant
<PAGE>
officer assists as such officer or the Board of Directors shall from
time to time prescribe.
ARTICLE V
Books and Records
-----------------
SECTION 1. Location. The Corporation shall keep correct
--------
and complete books and records of account and shall keep minutes of
the proceedings of the shareholders, of the Board of Directors, and/or
of any committee which the Board of Directors may appoint, and shall
keep at the office of the Corporation in or outside of the District of
Columbia or at the office of the transfer agent or registrar, if any,
a record containing the names and addresses of all shareholders, the
number and class of shares held by each, and the dates when such
shareholders respectively became the owners of record thereof. Any of
the foregoing books, minutes or records may be in written form or in
any other form capable of being converted into written form within a
reasonable time.
SECTION 2. Addresses of Shareholders. Notices of meetings
-------------------------
and all other corporate notices may be delivered personally or mailed
to each shareholder at said shareholder's address as it appears on the
records of the Corporation.
SECTION 3. Fixing Date for Determination of Shareholders of
------------------------------------------------
Record. For the purpose of determining the shareholders entitled to
------
notice of or to vote at any meeting of shareholders or any adjournment
thereof, or to express to consent to or dissent from any proposal
without a meeting, or for the purpose of determining shareholders
entitled to receive payment of any dividend or the allotment of any
rights, or for the purpose of any other action, the Board of Directors
may fix, in advance, a record date, in accordance with the provisions
of the Business Corporation Law. If no record date is fixed, the
record date for determining shareholders entitled to notice of or to
vote at a meeting of shareholders shall be at the close of business on
the day next preceding the day on which notice is given, or, if notice
is waived, at the close of business on the day next preceding the day
on which the meeting is held. The record date for determining
shareholders for any purpose other than that specified in the
preceding sentence shall be at the close of business on the day on
which the Board of Directors adopts the resolution relating thereto.
A determination of shareholders of record entitled to notice of or to
vote at a meeting of shareholders shall apply to any adjournment of
the
<PAGE>
meeting; provided, however, that the Board of Directors may fix a new
record date for the adjourned meeting.
ARTICLE VI
Certificates Representing Shares
--------------------------------
SECTION 1. Certificates; Signatures. (a) The shares of
------------------------
the Corporation shall be represented by certificates representing
shares, in such form as the Board of Directors may from time to time
prescribe, or shall be uncertificated shares. Certificates repre-
senting shares shall have set forth thereon the statements prescribed
by law and shall be signed by the Chairman of the Board or the
President or a Vice-President and by the Secretary or an Assistant
Secretary or a Treasurer or an Assistant Treasurer and may be sealed
with the corporate seal or a facsimile thereof. Any and all
signatures on any such certificate may be facsimiles if the
certificate is countersigned by a transfer agent or registered by a
registrar other than the Corporation itself or its employee, or the
shares are listed on a registered national securities exchange. In
case any officer who has signed or whose facsimile signature has been
placed upon a certificate shall have ceased to be such officer before
such certificate is issued, it may be issued by the Corporation with
the same effect as if such officer were an officer at the date of its
issue.
(b) Each certificate representing shares issued by the
Corporation, if the Corporation is authorized to issue shares of more
than one class, shall set forth upon the face or back of the
certificate, or shall state that the Corporation will furnish to any
shareholder upon request and without charge, a full statement of the
designation, relative rights, preferences and limitations of the
shares of each class authorized to be issued and, if the Corporation
is authorized to issue any class of preferred shares in series, the
designation, relative rights, preferences and limitations of each such
series so far as the same have been fixed and the authority of the
Board of Directors to designate and fix the relative rights,
preferences and limitations of other series.
(c) Each certificate representing shares shall state upon
the face thereof:
(1) That the Corporation is formed under the laws of the
District of Columbia;
<PAGE>
(2) The name of the person or persons to whom issued; and
(3) The number and class of shares, the par value of each
such share and the designation of the series, if any,
which such certificate represents.
(d) The name of the holder of record of the shares
represented thereby, with the number of shares and the date of issue,
shall be entered on the books of the Corporation.
SECTION 2. Transfer of Shares. Upon compliance with
------------------
provisions governing or restricting the transferability of shares, if
any, transfers of shares of the Corporation shall be made only on the
share record of the Corporation by the registered holder thereof, or
by such holder's attorney-in-fact thereunto authorized by power of
attorney duly executed and filed with the Secretary of the Corporation
or with a transfer agent or a registrar, if any, and upon the
surrender of the certificate or certificates for such shares properly
endorsed and the payment of all taxes due thereon, if any. A
certificate representing shares shall not be issued until the full
amount of consideration therefor has been paid, except as the Business
Corporation Law may otherwise permit.
SECTION 3. Fractional Shares. The Corporation may, but
-----------------
shall not be required to, issue certificates for fractions of a share
where necessary to effect transactions authorized by the Business
Corporation Law, which shall entitle the holder, in proportion to such
holder's fractional holdings, to exercise voting rights, receive divi-
dends and participate in liquidating distributions; or the Corporation
may pay in cash the fair value of fractions of a share as of the time
when those entitled to receive such fractions are determined; or it
may issue scrip in registered or bearer form over the manual or
facsimile signature of an officer of the Corporation or of its agent,
exchangeable as therein provided for full shares, but such scrip shall
not entitle the holder to any rights of a shareholder except as
therein provided. The Board of Directors shall have power and
authority to make all such rules and regulations as it may deem
expedient concerning the issue, transfer and registration of
certificates representing shares of the Corporation.
SECTION 4. Lost, Stolen or Destroyed Certificates. The
--------------------------------------
Corporation may issue a new certificate of stock in place of any
certificate, theretofore issued by it, alleged to have been lost,
stolen or destroyed, and the Board of Directors may require the owner
of any lost, stolen or destroyed certificate, or his
<PAGE>
legal representative, to give the Corporation a bond sufficient to
indemnify the Corporation against any claim that may be made against
it on account of the alleged loss, theft or destruction of any such
certificate or the issuance of any such new certificate.
ARTICLE VII
Dividends
---------
Subject always to the provisions of law and the Articles of
Incorporation, the Board of Directors shall have full power to
determine whether any, and, if any, what part of any, funds legally
available for the payment of dividends shall be declared as dividends
and paid to shareholders; the division of the whole or any part of
such funds of the Corporation shall rest wholly within the lawful dis-
cretion of the Board of Directors, and it shall not be required at any
time, against such discretion, to divide or pay any part of such funds
among or to the shareholders as dividends or otherwise; and before
payment of any dividend, there may be set aside out of any funds of
the Corporation available for dividends such sum or sums as the Board
of Directors from time to time, in its absolute discretion, thinks
proper as a reserve or reserves to meet contingencies, or for equal-
izing dividends, or for repairing or maintaining any property of the
Corporation, or for such other purpose as the Board of Directors shall
think conducive to the interest of the Corporation, and the Board of
Directors may modify or abolish any such reserve in the manner in
which it was created.
ARTICLE VIII
Ratification
------------
Any transaction, questioned in any law suit on the ground of
lack of authority, defective or irregular execution, adverse interest
of director, officer or shareholder, nondisclosure, miscomputation, or
the application of improper principles or practices of accounting, may
be ratified, before or after judgment, by the Board of Directors or by
the shareholders and if so ratified shall have the same force and
effect as if the questioned transaction had been originally duly
authorized. Such ratification shall be binding upon the Corporation
and its shareholders and shall constitute a bar to any claim or
execution of any judgment in respect of such questioned transaction.
<PAGE>
ARTICLE IX
Corporate Seal
--------------
The corporate seal shall have inscribed thereon the name of
the Corporation and the year of its incorporation, and shall be in
such form and contain such other words and/or figures as the Board of
Directors shall determine. The corporate seal may be used by
printing, engraving, lithographing, stamping or otherwise making,
placing or affixing, or causing to be printed, engraved, lithographed,
stamped or otherwise made, placed or affixed, upon any paper or
document, by any process whatsoever, an impression, facsimile or other
reproduction of said corporate seal.
ARTICLE X
Fiscal Year
-----------
The fiscal year of the Corporation shall be fixed, and shall
be subject to change, by the Board of Directors. Unless otherwise
fixed by the Board of Directors, the fiscal year of the Corporation
shall be the calendar year.
ARTICLE XI
Waiver of Notice
----------------
Whenever notice is required to be given by these By-laws or
by the Articles of Incorporation or by law, a written waiver thereof,
signed by the person or persons entitled to said notice, whether
before or after the time stated therein, shall be deemed equivalent to
notice.
ARTICLE XII
Indemnification
---------------
SECTION 1. General Scope. The Corporation, to the fullest
-------------
extent permitted and in the manner required by the laws of the
District of Columbia as in effect at the time of the adoption of this
Article XII or as the law may be amended from time to time, shall,
except as set forth in Article XII, Section 2 below, (i) indemnify any
officer or director of the Corporation, or any other person designated
by the Board of Directors as
<PAGE>
being entitled to indemnification (and the heirs and legal represen-
tatives of such person) made, or threatened to be made, a party in an
action or proceeding (including, without limitation, one by or in the
right of the Corporation to procure a judgment in its favor), whether
civil or criminal, including an action by or in the right of any other
corporation of any type or kind, domestic or foreign, or any partner-
ship, joint venture, trust, employee benefit plan or other enterprise,
which any indemnified representative served in any capacity at the
request of the Corporation, by reason of the fact that such
indemnified person, or such indemnified person's testator or
intestate, was a director or officer of the Corporation or served such
other corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise in any capacity, and (ii) provide to any such
indemnified person (and the heirs and legal representatives of such
person) advances for expenses incurred in pursuing such action or
proceeding, upon receipt of an undertaking by or on behalf of such
indemnified person to repay such amount as, and to the extent,
required by the Business Corporation Law.
SECTION 2. Limitations on Indemnification. The Corporation
------------------------------
shall not indemnify any indemnified representative: (a) where such
indemnification is expressly prohibited by applicable law; (b) where
the conduct of the indemnified representative has been finally
determined (i) to constitute willful misconduct or recklessness or
(ii) to be based upon or attributable to the receipt by the indemni-
fied representative of a personal benefit from the Corporation to
which the indemnified representative is not legally entitled; or (c)
to the extent such indemnification has been determined to be otherwise
unlawful.
SECTION 3. Indemnification Not Exclusive. The rights
-----------------------------
granted by this Article shall not be deemed exclusive of any other
rights to which those seeking indemnification may be entitled under
any statute, agreement, vote of shareholders or disinterested
directors or otherwise. The indemnification provided by or granted
pursuant to this Article shall continue as to a person who has ceased
to be an indemnified representative in respect of matters arising
prior to such time, and shall inure to the benefit of the heirs,
executors, administrators and personal representatives of such a
person.
SECTION 4. Contract Rights; Amendment or Repeal. All
------------------------------------
rights under this Article shall be deemed a contract between the
Corporation and the indemnified representative pursuant to which the
Corporation and each indemnified representative intend to be legally
bound. Any repeal, amendment or modification hereof
<PAGE>
shall be prospective only and shall not affect any rights or
obligations then existing.
ARTICLE XIII
Bank Accounts, Drafts, Contracts, Etc.
--------------------------------------
SECTION 1. Bank Accounts and Drafts. In addition to such
------------------------
bank accounts as may be authorized by the Board of Directors, the
Treasurer or any person designated by the Treasurer, whether or not an
employee of the Corporation, may authorize such bank accounts to be
opened or maintained in the name and on behalf of the Corporation as
such person may deem necessary or appropriate, and may authorize pay-
ments from such bank accounts to be made upon and according to the
check of the Corporation in accordance with the written instructions
of the Treasurer, or other person so designated by the Treasurer.
SECTION 2. Contracts. The Board of Directors may authorize
---------
any person or persons, in the name and on behalf of the Corporation,
to enter into or execute and deliver any and all deeds, bonds,
mortgages, contracts and other obligations or instruments, and such
authority may be general or confined to specific instances.
SECTION 3. Proxies; Powers of Attorney; Other Instruments.
----------------------------------------------
The Chairman, the President or any other person designated by either
of them shall have the power and authority to execute and deliver
proxies, powers of attorney and other instruments on behalf of the
Corporation in connection with the rights and powers incident to the
ownership of stock by the Corporation. The Chairman, the President or
any other person authorized by proxy or power of attorney executed and
delivered by either of them on behalf of the Corporation may attend
and vote at any meeting of shareholders of any company in which the
Corporation may hold stock, and may exercise on behalf of the
Corporation any and all of the rights and powers incident to the
ownership of such stock at any such meeting, or otherwise as specified
in the proxy or power of attorney so authorizing any such person. The
Board of Directors, from time to time, may confer like powers upon any
other person.
SECTION 4. Financial Reports. The directors may appoint
-----------------
the Treasurer or other fiscal officer and/or the Secretary or any
other officer to cause to be prepared and furnished to shareholders
entitled thereto any special financial
<PAGE>
notice and/or financial statement, as the case may be, which may be
required by any provision of law.
ARTICLE XIV
Amendments
----------
The shareholders entitled to vote in the election of
directors may amend or repeal the By-laws and may adopt new By-laws.
Except as otherwise required by law or by the provisions of these
By-laws, the Board of Directors may also amend or repeal the By-laws
and adopt new By-laws, but By-laws adopted by the Board of Directors
may be amended or repealed by the said shareholders. Any change in
the By-laws shall take effect when adopted unless otherwise provided
for in the resolution effecting the change.
NYFS06...:\47\41847\0008\1710\EXHD126R.280
Exhibit 3.2(l)(i)
<PAGE>
B Y - L A W S
OF
CHECK MART OF WISCONSIN, INC.
(a Wisconsin Corporation
ARTICLE I. - OFFICES
A. The registered office of the corporation in the State
of Wisconsin shall be c/o CT Corporation System, 44 East Mifflin
Street, Madison, Wisconsin 53703.
B. The corporation may also have offices at such other
places within or without Wisconsin as the Board of Directors may from
time to time appoint or the business of the Corporation may require.
ARTICLE II. - SEAL
A. The corporation seal shall have inscribed thereon the
name of the corporation, the year of its organization and the words
"Corporate Seal, Wisconsin."
ARTICLE III. - SHAREHOLDERS' MEETING
A. Meetings of the shareholders shall be held at the
registered office of the corporation or at such other place or places,
either within or without the State of Wisconsin, as may from time to
time be selected.
B. The annual meeting of the shareholders shall be held on
the first day of April in each year if not a legal holiday, and if a
legal holiday, then on the next secular day following at 10 o'clock
A.M., when they shall elect a Board of Directors, and transact such
other business as may properly be brought before the meeting. If the
annual meeting shall not be called and held during any calendar year,
any shareholder may call such meeting at any time thereafter.
<PAGE>
C. The presence, in person or by proxy, of shareholders
entitled to cast at least a majority of the votes which all
shareholders are entitled to cast on the particular matter shall
constitute a quorum for the purpose of considering such matter, and,
unless otherwise provided by statute the acts, at a duly organized
meeting, of the shareholders present, in person or by proxy, entitled
to cast at least a majority of the votes which all shareholders
present are entitled to cast shall be the acts of the shareholders.
The shareholders present at a duly organized meeting can continue to
do business until adjournment, notwithstanding the withdrawal of
enough shareholders to leave less than a quorum. Adjournment or
adjournments of any annual or special meeting may be taken, but any
meeting at which directors are to be elected shall be adjourned only
from day to day, or for such longer periods not exceeding fifteen days
each, as may be directed by shareholders who are present in person or
by proxy and who are entitled to cast at least a majority of the votes
which all such shareholders would be entitled to cast at an election
of directors until such directors have been elected. If a meeting
cannot be organized because a quorum has not attended, those present
may, except as otherwise provided by statute, adjourn the meeting to
such time and place as they may determine, but in the case of any
meeting called for the election of directors, those who attend the
second
<PAGE>
of such adjourned meetings, although less than a quorum, shall
nevertheless constitute a quorum for the purpose of electing
directors.
D. Every shareholder entitled to vote at a meeting of
shareholders, or to express consent or dissent to corporate action in
writing without a meeting, may authorize another person or persons to
act for him by proxy. Every proxy shall be executed in writing by the
shareholders, or by his duly authorized attorney in fact, and filed
with the Secretary of the corporation. No unrevoked proxy shall be
valid after eleven months from the date of its execution, unless a
longer time is expressly provided therein. A proxy shall not be
revoked by the death or incapacity of the maker unless before the vote
is counted or the authority is exercised, written notice of such death
or incapacity is given to the Secretary of the corporation. A
shareholder shall not sell his vote or execute a proxy to any person
for any sum of money or anything of value. A proxy coupled with an
interest shall include an unrevoked proxy in favor of a creditor of a
shareholder and such proxy shall be valid so long as the debt owed by
him to the creditor remains unpaid. Elections for directors need not
be by ballot, except upon demand made by a shareholder at the election
and before the voting begins. Except as otherwise provided in the
Articles, in each election of directors cumulative voting shall be
allowed.
<PAGE>
No share shall be voted at any meeting upon which any installment is
due and unpaid.
E. Written notice of the annual meeting shall be given to
each shareholder entitled to vote thereat, at least ten days prior to
the meeting.
F. In advance of any meeting of shareholders, the Board of
Directors may appoint judges of election, who need not be
shareholders, to act at such meeting or any adjournment thereof. If
judges of election be not so appointed, the chairman of any such
meeting may, and on the request of any shareholder or his proxy shall,
make such appointment at any meeting. The number of judges shall be
one or three. If appointed at a meeting on the request of one or more
shareholders or proxies, the majority of shares present and entitled
to vote shall determine whether one or three judges are to be
appointed. On request of the chairman of the meeting, or of any
shareholder or his proxy, the judges shall make a report in writing of
any challenge or question or matter determined by them, and execute a
certificate of any fact found by there. No person who is a candidate
for office shall act as a judge.
G. Special meetings of the shareholders may be called at
any time by the President, or the Board of Directors, or shareholders
entitled to cast at least one-tenth of the votes which all
shareholders are entitled to cast at the particular
<PAGE>
meeting. At any time, upon written request of any person or persons
who have duly called a special meeting, it shall be the duty of the
Secretary to fix the date of the meeting, to be held not more than
sixty days after the receipt of the request, and to give due notice
thereof. If the Secretary shall neglect or refuse to fix the date of
the meeting and give notice thereof, the person or persons calling the
meeting may do so.
H. Business transacted at all special meetings shall be
confined to the objects stated in the call and matters germane
thereto, unless all shareholders entitled to vote are present and
consent.
I. Written notice of a special meeting of the shareholders
stating the time and place and object thereof, shall be given to each
shareholder entitled to vote thereat at least ten days before such
meeting, unless a greater period of notice is required by statute in a
particular case.
J. The officer or agent having charge of the transfer
books shall make at least five days before each meeting of
shareholders, a complete list of the shareholders entitled to vote at
the meeting, arranged in alphabetical order, with the address of and
the number of shares held by each, which list shall be subject to
inspection by any shareholder at any time during usual business hours.
Such list shall also be produced and kept open at the time and place
of the meeting, and shall be
<PAGE>
subject to the inspection of any shareholder during the whole time of
the meeting. The original share ledger or transfer book, or a
duplicate thereof kept in this state, shall be prima facie evidence as
to who are the shareholders entitled to examine such list or share
ledger or transfer book, or to vote in person or by proxy at any
meeting of shareholders.
ARTICLE IV. - DIRECTORS
A. The business of this corporation shall be managed by
its Board of Directors, two in number. The directors need not be
resident of this state or shareholders in the corporation. They shall
be elected by the shareholders at the annual meeting of shareholders
of the corporation, and each director shall be elected for the term of
one year, and until his successor shall be elected and shall qualify.
B. In addition to the powers and authorities by these
ByLaws expressly conferred upon them, the Board may exercise all such
powers of the corporation and do all such lawful acts and things as
are not by statute or by the Articles or by these By-Laws directed or
required to be exercised or done by the shareholders.
C. The meetings of the Board of Directors may be held at
such place within this state, or elsewhere, as a majority of
<PAGE>
the directors may from time to time appoint, or as may be designated
in the notice calling the meeting.
D. Each newly elected Board may meet at such place and
time as shall be fixed by the shareholders at the meeting at which
such directors are elected and no notice shall be necessary to the
newly elected directors in order legally to constitute the meeting, or
they may meet at such place and time as may be fixed by the consent in
writing of all the directors.
E. Regular meetings of the Board shall be held without
notice at the registered office of the corporation, or at such other
time and place as shall be determined by the Board.
F. Special meetings of the Board may be called by the
President on two days' notice to each director, either personally or
by mail or by telegram; special meetings shall be called by the
President or Secretary in like manner and on like notice on the
written request of a majority of the directors in office.
G. A majority of the directors in office shall be
necessary to constitute a quorum for the transaction of business, and
the acts of a majority of the directors present at a meeting at which
a quorum is present shall be the acts of the Board of Directors. Any
action which may be taken at a meeting of the directors may be taken
without a meeting if a consent or consents in writing, setting forth
the action so taken, shall be signed by
<PAGE>
all the directors and shall be filed with the Secretary of the
corporation.
H. Directors as such, shall not receive any stated salary
for their services, but by resolution of the Board, a fixed sum and
expenses of attendance, if any, may be allowed for attendance at each
regular or special meeting of the Board PROVIDED, that nothing herein
contained shall be construed to preclude any director from serving the
corporation in any other capacity and receiving compensation therefor.
ARTICLE V. - OFFICERS
A. The executive officers of the corporation shall be
chosen by the directors and shall be a President, Secretary and
Treasurer. The Board of Directors may also choose a Vice President,
and such other officers and agents as it shall deem necessary, who
shall hold their offices for such terms and shall have such authority
and shall perform such duties as from time to time shall be prescribed
by the Board. Any number of offices may be held by the same person
except the offices of President and Secretary, and the offices of
President and Vice President. It shall not be necessary for the
officers to be directors.
B. The salaries of all officers and agents of the
corporation shall be fixed by the Board of Directors.
<PAGE>
C. The officers of the corporation shall hold office for
one year and until their successors are chosen and have qualified.
Any officer or agent elected or appointed by the Board may be removed
by the Board of Directors whenever in its judgment the best interests
of the corporation will be served thereby.
D. The President shall be the chief executive officer of
the corporation; he shall preside at all meetings of the shareholders
and directors; he shall have general and active management of the
business of the corporation, shall see that all orders and resolutions
of the Board are carried into effect, subject, however, to the right
of the directors to delegate any specific powers, except such as may
be by statute exclusively conferred on the President, to any other
officer or officers of the corporation. He shall execute bonds,
mortgages and other contracts requiring a seal, under the seal of the
corporation. He shall be EX-OFFICIO a member of all committees, and
shall have the general powers and duties of supervision and management
usually vested in the office of the President of a corporation.
E. The Secretary shall attend all sessions of the Board
and all meetings of the shareholders and act as clerk thereof, and
record all the votes of the corporation and the minutes of all its
transactions in a book to be kept for that purpose; and shall perform
like duties for all committees of the
<PAGE>
Board of Directors when required. He shall give, or cause to be
given, notice of all meetings of the shareholders and of the Board of
Directors, and shall perform such other duties as may be prescribed by
the Board of Directors or President, and under whose supervision he
shall be. He shall keep in safe custody the corporate seal of the
corporation, and when authorized by the Board, affix the same to any
instrument requiring it.
F. The Treasurer shall have custody of the corporate funds
and securities and shall keep full and accurate accounts of receipts
and disbursements in books belonging to the corporation, and shall
keep the moneys of the corporation in a separate account to the credit
of the corporation. He shall disburse the funds of the corporation as
may be ordered by the Board, taking proper vouchers for such
disbursements, and shall render to the President and directors, at the
regular meetings of the Board, or whenever they may require it, an
account of all his transactions as Treasurer and of the financial
condition of the corporation.
ARTICLE VI. - VACANCIES
A. If the office of any officer or agent, one or more,
becomes vacant for any reason, the Board of Directors may choose a
successor or successors, who shall hold office for the unexpired term
in respect of which such vacancy occurred.
B. Vacancies in the Board of Directors, including
vacancies resulting from an increase in the number of directors,
<PAGE>
shall be filled by a majority of the remaining members of the Board
though less than a quorum, and each person so elected shall be a
director until his successor is elected by the shareholders, who may
make such election at the next annual meeting of the shareholders or
at any special meeting duly called for that purpose and held prior
thereto.
ARTICLE VII. - CORPORATE RECORDS
A. There shall be kept at the registered office or
principal place of business of the corporation an original or
duplicate record of the proceedings of the shareholders and of the
directors, and the original or a copy of its By-Laws, including all
amendments or alterations thereto to date, certified by the Secretary
of the corporation. An original or duplicate share register shall
also be kept at the registered office or principal place of business
or at the office of a transfer agent or registrar, giving the names of
the shareholders, their respective addresses and the number and
classes of shares held by each.
B. Every shareholder shall, upon written demand under oath
stating the purpose thereof, have a right to examine, in person or by
agent or attorney, during the usual hours for business for any proper
purpose, the share register, books or records of account, and records
of the proceedings of the
<PAGE>
shareholders and directors, and make copies or extracts therefrom. A
proper purpose shall mean a purpose reasonably related to such
person's interest as a shareholder. In every instance where an
attorney or other agent shall be the person who seeks the right to
inspection, the demand under oath shall be accompanied by a power of
attorney or such other writing which authorized the attorney or other
agent to so act on behalf of the shareholder. The demand under oath
shall be directed to the corporation at its registered office in the
State or at its principal place of business.
ARTICLE VIII. - SHARE CERTIFICATES, DIVIDENDS, ETC.
A. The share certificates of the corporation shall be
numbered and registered in the share ledger and transfer books of the
corporation as they are issued. They shall bear the corporate seal
and shall be signed by the President or a Vice President and the
Secretary or Assistant Secretary.
B. Transfer of shares shall be made on the books of the
corporation upon surrender of the certificates therefor, endorsed by
the person named in the certificate or by attorney, lawfully
constituted in writing. No transfer shall be made which is
inconsistent with law.
C. The Board of Directors may fix a time, not more than
fifty days, prior to the date of any meeting of
<PAGE>
shareholders, or the date fixed for the payment of any dividend or
distribution, or the date for the allotment of rights, or the date
when any change or conversion or exchange of shares will be made or go
into effect, as a record date for the determination of the
shareholders entitled to notice of, or to vote at, any such meeting,
or entitled to receive payment of any such dividend or distribution,
or to receive any such allotment of rights, or to exercise the rights
in respect to any such change, conversion, or exchange of shares. In
such case, only such shareholders as shall be shareholders of record
on the date so fixed shall be entitled to notice of, or to vote at,
such meeting or to receive payment of such dividend, or to receive
such allotment of rights, or to exercise such rights, as the case may
be, notwithstanding any transfer of any shares on the books of the
corporation after any record date fixed as aforesaid. The Board of
Directors may close the books of the corporation against transfers of
shares during the whole or any part of such period, and in such case,
written or printed notice thereof shall be mailed at least ten days
before the closing thereof to each shareholder of record at the
address appearing on the records of the corporation or supplied by him
to the corporation for the purpose of notice. While the stock transfer
books of the corporation are closed, no transfer of shares shall be
made thereon. If no record date is fixed for the determination of
shareholders entitled to receive
<PAGE>
notice of, or vote at, a shareholders' meeting, transferees or shares
which are transferred on the books of the corporation within ten days
next preceding the date of such meeting shall not be entitled to
notice of or to vote at such meeting.
D. In the event that a share certificate shall be lost,
destroyed or mutilated, a new certificate may be issued thereof or
upon such terms and indemnity to the corporation as the Board of
Directors may prescribe.
E. The Board of Directors may declare and pay dividends
upon the outstanding shares of the corporation, from time to time and
to such extent as they deem advisable, in the manner and upon the
terms and conditions provided by statute and the Articles of
Incorporation.
F. Before payment of any dividend there may be set aside
out of the net profits of the corporation such sum or sums as the
directors, from time to time, in their absolute discretion, think
proper as a reserve fund to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the
corporation, or for such other purpose as the directors shall think
conducive to the interests of the corporation, and the directors may
abolish any such reserve in the manner in which it was created.
<PAGE>
ARTICLE IX. - MISCELLANEOUS PROVISIONS
A. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers as the Board
of Directors may from time to time designate.
B. The fiscal year of the corporation shall begin on the
first day of January.
C. Whenever written notice is required to be given to any
person, it may be given to such person, either personally or by
sending a copy thereof through the mail, or by telegram, charges
prepaid, to his address appearing on the books of the corporation, or
supplied by him to the corporation for the purpose of notice. If the
notice is sent by mail or by telegraph, it shall be deemed to have
been given to the person entitled thereto when deposited in the United
States mail or with a telegraph office for the transmission to such
person. Such notice shall specify the place, day and hour of the
meeting and, in the case of a special meeting of shareholders, the
general nature of the business to be transacted.
D. Whenever any written notice is required by statute, or
by the Articles or By-Laws of this corporation, a waiver thereof in
writing, signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice. Except in the case of a
special meeting of shareholders, neither the business to be transacted
at nor the purpose of the meeting
<PAGE>
need be specified in the waiver of notice of such meeting. Attendance
of a person, either in person or by proxy, at any meeting shall
constitute a waiver of notice of such meeting, except where a person
attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting was not lawfully
called or convened.
E. One or more directors or shareholders may participate
in a meeting of the Board, or a committee of the Board or of the
shareholders, by means of conference telephone or similar
communications equipment by means of which all persons participating
in the meeting can hear each other.
F. Except as otherwise provided in the Articles or By-Laws
of this corporation, any action which may be taken at a meeting, of
the shareholders or of a class of shareholders may be taken without a
meeting, if a consent or consents in writing, setting forth the action
so taken, shall be signed by all of the shareholders who would be
entitled to vote at a meeting for such purpose and shall be filed with
the Secretary of the corporation.
G. Any payments made to any officer or employee of the
corporation such as a salary, commission, bonus, interest, rent,
travel or entertainment expense incurred by him, which shall be
disallowed in whole or in part as a deductible expense by the Internal
Revenue Service, shall be reimbursed by such officer or employee to
the corporation to the full extent of
<PAGE>
such disallowance. It shall be the duty of the directors, as a Board,
to enforce payment of each such amount disallowed. In lieu of payment
by the officer or employee, subject to the determination of the
directors, proportionate amounts may be withheld from his future
compensation payments until the amount owed to the corporation has
been recovered.
ARTICLE X. - ANNUAL STATEMENT
A. The President and Board of Directors shall present at
each annual meeting a full and complete statement of the business and
affairs of the corporation for the preceding year. Such statement
shall be prepared and presented in whatever manner the Board of
Directors shall deem advisable and need not be verified by a certified
public accountant.
ARTICLE XI. - AMENDMENTS
A. These By-Laws may be amended or repealed by the vote of
shareholders entitled to cast at least a majority of the votes which
all shareholders are entitled to cast thereon, at any regular or
special meeting of the shareholders, duly convened after notice to the
shareholders of that purpose.
NYFS06...:\47\41847\0008\1710\EXHD166X.040
Exhibit 3.2(m)(i)
<PAGE>
BY-LAWS
OF
DFG WAREHOUSING CO., INC.
(a Delaware corporation)
ARTICLE I
Stockholders
------------
SECTION 1. Annual Meetings. The annual meeting of
---------------
stockholders for the election of directors and for the transaction of
such other business as may properly come before the meeting shall be
held each year at such date and time, within or without the State of
Delaware, as the Board of Directors shall determine.
SECTION 2. Special Meetings. Special meetings of
----------------
stockholders for the transaction of such business as may properly come
before the meeting may be called by order of the Board of Directors or
by stockholders holding together at least a majority of all the shares
of the Corporation entitled to vote at the meeting, and shall be held
at such date and time, within or without the State of Delaware, as may
be specified by such order. Whenever the directors shall fail to fix
such place, the meeting shall be held at the principal executive
office of the Corporation.
SECTION 3. Notice of Meetings. Written notice of all
------------------
meetings of the stockholders, stating the place, date and hour of the
meeting and the place within the city or other municipality or
community at which the list of stockholders may be examined, shall be
mailed or delivered to each stockholder not less than 10 nor more than
60 days prior to the meeting. Notice of any special meeting shall
state in general terms the purpose or purposes for which the meeting
is to be held.
SECTION 4. Stockholder Lists. The officer who has charge
-----------------
of the stock ledger of the Corporation shall prepare and make, at
least 10 days before every meeting of stockholders, a complete list of
the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and
the number of shares registered in the name of each stockholder. Such
list shall be open to the examination of any stockholder, for any
purpose germane to the
<PAGE>
meeting, either at a place within the city where the meeting is to be
held, which place shall be specified in the notice of the meeting, or,
if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the
meeting during the whole time thereof, and may be inspected by any
stockholder who is present.
The stock ledger shall be the only evidence as to who are
the stockholders entitled to examine the stock ledger, the list
required by this section or the books of the Corporation, or to vote
in person or by proxy at any meeting of stockholders.
SECTION 5. Quorum. Except as otherwise provided by law or
------
the Corporation's Certificate of Incorporation, a quorum for the
transaction of business at any meeting of stockholders shall consist
of the holders of record of a majority of the issued and outstanding
shares of the capital stock of the Corporation entitled to vote at the
meeting, present in person or by proxy. At all meetings of the
stockholders at which a quorum is present, all matters, except as
otherwise provided by law or the Certificate of Incorporation, shall
be decided by the vote of the holders of a majority of the shares
entitled to vote thereat present in person or by proxy. If there be
no such quorum, the holders of a majority of such shares so present or
represented may adjourn the meeting from time to time, without further
notice, until a quorum shall have been obtained. When a quorum is
once present it is not broken by the subsequent withdrawal of any
stockholder.
SECTION 6. Organization. Meetings of stockholders shall be
------------
presided over by the Chairman, if any, or if none or in the Chairman's
absence the Vice-Chairman, if any, or if none or in the Vice-
Chairman's absence the President, if any, or if none or in the
President's absence a Vice-President, or, if none of the foregoing is
present, by a chairman to be chosen by the stockholders entitled to
vote who are present in person or by proxy at the meeting. The
Secretary of the Corporation, or in the Secretary's absence an
Assistant Secretary, shall act as secretary of every meeting, but if
neither the Secretary nor an Assistant Secretary is present, the
presiding officer of the meeting shall appoint any person present to
act as secretary of the meeting.
SECTION 7. Voting; Proxies; Required Vote.
------------------------------
(a) At each meeting of stockholders, every stockholder shall be
entitled to vote in person or by proxy appointed by instrument in
writing, subscribed by such stockholder or by such stockholder's duly
authorized attorney-in-fact (but no such proxy shall be
<PAGE>
voted or acted upon after eleven months from its date, unless the
proxy provides for a longer period), and, unless the Certificate of
Incorporation provides otherwise, shall have one vote for each share
of stock entitled to vote registered in the name of such stockholder
on the books of the Corporation on the applicable record date fixed
pursuant to these By-laws. At all elections of directors the voting
may but need not be by ballot and a plurality of the votes cast there
shall elect. Except as otherwise required by law or the Certificate
of Incorporation, any other action shall be authorized by a majority
of the votes cast.
(b) Any action required or permitted to be taken at any
meeting of stockholders may, except as otherwise required by law or
the Certificate of Incorporation, be taken without a meeting, without
prior notice and without a vote, if a consent in writing, setting
forth the action so taken, shall be signed by the holders of record of
the issued and outstanding capital stock of the Corporation having a
majority of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were
present and voted, and the writing or writings are filed with the
permanent records of the Corporation. Prompt notice of the taking of
corporate action without a meeting by less than unanimous written
consent shall be given to those stockholders who have not consented in
writing.
(c) Where a separate vote by a class or classes, present in
person or represented by proxy, shall constitute a quorum entitled to
vote on that matter, the affirmative vote of the majority of shares of
such class or classes present in person or represented by proxy at the
meeting shall be the act of such class, unless otherwise provided in
the Corporation's Certificate of Incorporation.
SECTION 8. Inspectors. The Board of Directors, in advance
----------
of any meeting, may, but need not, appoint one or more inspectors of
election to act at the meeting or any adjournment thereof. If an
inspector or inspectors are not so appointed, the person presiding at
the meeting may, but need not, appoint one or more inspectors. In
case any person who may be appointed as an inspector fails to appear
or act, the vacancy may be filled by appointment made by the directors
in advance of the meeting or at the meeting by the person presiding
thereat. Each inspector, if any, before entering upon the discharge
of his or her duties, shall take and sign an oath faithfully to
execute the duties of inspector at such meeting with strict
impartiality and according to the best of his ability. The
inspectors, if any, shall determine the number of shares of stock
outstanding and the
<PAGE>
voting power of each, the shares of stock represented at the meeting,
the existence of a quorum, and the validity and effect of proxies, and
shall receive votes, ballots or consents, hear and determine all
challenges and questions arising in connection with the right to vote,
count and tabulate all votes, ballots or consents, determine the
result, and do such acts as are proper to conduct the election or vote
with fairness to all stockholders. On request of the person presiding
at the meeting, the inspector or inspectors, if any, shall make a
report in writing of any challenge, question or matter determined by
such inspector or inspectors and execute a certificate of any fact
found by such inspector or inspectors.
ARTICLE II
Board of Directors
------------------
SECTION 1. General Powers. The business, property and
--------------
affairs of the Corporation shall be managed by, or under the direction
of, the Board of Directors.
SECTION 2. Qualification; Number; Term; Remuneration. (a)
-----------------------------------------
Each director shall be at least 18 years of age. A director need not
be a stockholder, a citizen of the United States, or a resident of the
State of Delaware. The number of directors constituting the entire
Board shall be two, or such larger number as may be fixed from time to
time by action of the stockholders or Board of Directors, one of whom
may be selected by the Board of Directors to be its Chairman. The use
of the phrase "entire Board" herein refers to the total number of
directors which the Corporation would have if there were no vacancies.
(b) Directors who are elected at an annual meeting of
stockholders, and directors who are elected in the interim to fill
vacancies and newly created directorships, shall hold office until the
next annual meeting of stockholders and until their successors are
elected and qualified or until their earlier resignation or removal.
(c) Directors may be paid their expenses, if any, of
attendance at each meeting of the Board of Directors and may be paid a
fixed sum for attendance at each meeting of the Board of Directors or
a stated salary as director. No such payment shall preclude any
director from serving the Corporation in any other capacity and
receiving compensation therefor. Members of special or standing
committees may be allowed like compensation for attending committee
meetings.
<PAGE>
SECTION 3. Quorum and Manner of Voting. Except as
---------------------------
otherwise provided by law, a majority of the entire Board shall
constitute a quorum. A majority of the directors present, whether or
not a quorum is present, may adjourn a meeting from time to time to
another time and place without notice. The vote of the majority of
the directors present at a meeting at which a quorum is present shall
be the act of the Board of Directors. For the purposes of this
Section 3, so long as the Board consists of two members, the presence
or vote of one director shall be sufficient.
SECTION 4. Places of Meetings. Meetings of the Board of
------------------
Directors may be held at any place within or without the State of
Delaware, as may from time to time be fixed by resolution of the Board
of Directors, or as may be specified in the notice of meeting.
SECTION 5. Annual Meeting. Following the annual meeting of
--------------
stockholders, the newly elected Board of Directors shall meet for the
purpose of the election of officers and the transaction of such other
business as may properly come before the meeting. Such meeting may be
held without notice immediately after the annual meeting of
stockholders at the same place at which such stockholders' meeting is
held.
SECTION 6. Regular Meetings. Regular meetings of the Board
----------------
of Directors shall be held at such times and places as the Board of
Directors shall from time to time by resolution determine. Notice
need not be given of regular meetings of the Board of Directors held
at times and places fixed by resolution of the Board of Directors.
SECTION 7. Special Meetings. Special meetings of the Board
----------------
of Directors shall be held whenever called by the Chairman of the
Board, President or by a majority of the directors then in office.
SECTION 8. Notice of Meetings. A notice of the place, date
------------------
and time and the purpose or purposes of each meeting of the Board of
Directors shall be given to each director by mailing the same at least
two days before the meeting, or by telegraphing or telephoning the
same or by delivering the same personally not later than the day
before the day of the meeting.
SECTION 9. Organization. At all meetings of the Board of
------------
Directors, the Chairman, if any, or if none or in the Chairman's
absence or inability to act the President, or in the President's
absence or inability to act any Vice-President who is
<PAGE>
a member of the Board of Directors, or in such Vice-President's
absence or inability to act a chairman chosen by the directors, shall
preside. The Secretary of the Corporation shall act as secretary at
all meetings of the Board of Directors when present, and, in the
Secretary's absence, the presiding officer may appoint any person to
act as secretary.
SECTION 10. Resignation. Any director may resign at any
-----------
time upon written notice to the Corporation and such resignation shall
take effect upon receipt thereof by the President or Secretary, unless
otherwise specified in the resignation. Any or all of the directors
may be removed, with or without cause, by the holders of a majority of
the shares of stock outstanding and entitled to vote for the election
of directors.
SECTION 11. Vacancies. Unless otherwise provided in these
---------
By-laws, vacancies on the Board of Directors, whether caused by
resignation, death, disqualification, removal, an increase in the
authorized number of directors or otherwise, may be filled by the
affirmative vote of a majority of the remaining directors, although
less than a quorum, or by a sole remaining director, or at a special
meeting of the stockholders, by the holders of shares entitled to vote
for the election of directors.
SECTION 12. Action by Written Consent. Any action required
-------------------------
or permitted to be taken at any meeting of the Board of Directors may
be taken without a meeting if all the directors consent thereto in
writing, and the writing or writings are filed with the minutes of
proceedings of the Board of Directors.
ARTICLE III
Committees
----------
SECTION 1. Appointment. From time to time the Board of
-----------
Directors by a resolution adopted by a majority of the entire Board
may appoint any committee or committees for any purpose or purposes,
to the extent lawful, which shall have powers as shall be determined
and specified by the Board of Directors in the resolution of
appointment.
SECTION 2. Procedures, Quorum and Manner of Acting. Each
---------------------------------------
committee shall fix its own rules of procedure, and shall meet where
and as provided by such rules or by resolution of the Board of
Directors. Except as otherwise provided by law, the presence of a
majority of the then appointed members of a
<PAGE>
committee shall constitute a quorum for the transaction of business by
that committee, and in every case where a quorum is present the
affirmative vote of a majority of the members of the committee present
shall be the act of the committee. Each committee shall keep minutes
of its proceedings, and actions taken by a committee shall be reported
to the Board of Directors.
SECTION 3. Action by Written Consent. Any action required
-------------------------
or permitted to be taken at any meeting of any committee of the Board
of Directors may be taken without a meeting if all the members of the
committee consent thereto in writing, and the writing or writings are
filed with the minutes of proceedings of the committee.
SECTION 4. Term; Termination. In the event any person
-----------------
shall cease to be a director of the Corporation, such person shall
simultaneously therewith cease to be a member of any committee
appointed by the Board of Directors.
ARTICLE IV
Officers
--------
SECTION 1. Election and Qualifications. The Board of
---------------------------
Directors shall elect the officers of the Corporation, which shall
include a President and a Secretary, and may include, by election or
appointment, one or more Vice-Presidents (any one or more of whom may
be given an additional designation of rank or function), a Treasurer
and such assistant secretaries, such assistant treasurers and such
other officers as the Board may from time to time deem proper. Each
officer shall have such powers and duties as may be prescribed by
these By-laws and as may be assigned by the Board of Directors or the
President. Any two or more offices may be held by the same person
except the offices of President and Secretary.
SECTION 2. Term of Office and Remuneration. The term of
-------------------------------
office of all officers shall be one year and until their respective
successors have been elected and qualified, but any officer may be
removed from office, either with or without cause, at any time by the
Board of Directors. Any vacancy in any office arising from any cause
may be filled for the unexpired portion of the term by the Board of
Directors. The remuneration of all officers of the Corporation may be
fixed by the Board of Directors or in such manner as the Board of
Directors shall provide.
<PAGE>
SECTION 3. Resignation; Removal. Any officer may resign at
--------------------
any time upon written notice to the Corporation and such resignation
shall take effect upon receipt thereof by the President or Secretary,
unless otherwise specified in the resignation. Any officer shall be
subject to removal, with or without cause, at any time by vote of a
majority of the entire Board.
SECTION 4. Chairman of the Board. The Chairman of the
---------------------
Board of Directors, if there be one, shall preside at all meetings of
the Board of Directors and shall have such other powers and duties as
may from time to time be assigned by the Board of Directors.
SECTION 5. President and Chief Executive Officer. The
-------------------------------------
President shall be the chief executive officer of the Corporation, and
shall have such duties as customarily pertain to that office. The
President shall have general management and supervision of the
property, business and affairs of the Corporation and over its other
officers; may appoint and remove assistant officers and other agents
and employees and may execute and deliver in the name of the
Corporation powers of attorney, contracts, bonds and other obligations
and instruments.
SECTION 6. Vice-President. A Vice-President may execute
--------------
and deliver in the name of the Corporation contracts and other
obligations and instruments pertaining to the regular course of the
duties of said office, and shall have such other authority as from
time to time may be assigned by the Board of Directors or the
President.
SECTION 7. Treasurer. The Treasurer shall in general have
---------
all duties incident to the position of Treasurer and such other duties
as may be assigned by the Board of Directors or the President.
SECTION 8. Secretary. The Secretary shall in general have
---------
all the duties incident to the office of Secretary and such other
duties as may be assigned by the Board of Directors or the President.
SECTION 9. Assistant Officers. Any assistant officer shall
------------------
have such powers and duties of the officer such assistant officer
assists as such officer or the Board of Directors shall from time to
time prescribe.
<PAGE>
ARTICLE V
Books and Records
-----------------
SECTION 1. Location. The books and records of the
--------
Corporation may be kept at such place or places within or outside the
State of Delaware as the Board of Directors or the respective officers
in charge thereof may from time to time determine. The record books
containing the names and addresses of all stockholders, the number and
class of shares of stock held by each and the dates when they
respectively became the owners of record thereof shall be kept by the
Secretary as prescribed in the By-laws and by such officer or agent as
shall be designated by the Board of Directors.
SECTION 2. Addresses of Stockholders. Notices of meetings
-------------------------
and all other corporate notices may be delivered personally or mailed
to each stockholder at the stockholder's address as it appears on the
records of the Corporation.
SECTION 3. Fixing Date for Determination of Stockholders of
------------------------------------------------
Record. (a) In order that the Corporation may determine the
------
stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, the Board of Directors may
fix a record date, which record date shall not precede the date upon
which the resolution fixing the record date is adopted by the Board of
Directors. If no record date is fixed by the Board of Directors, the
record date for determining stockholders entitled to notice of or to
vote at a meeting of stockholders shall be at the close of business on
the day next preceding the day on which notice is given, or, if notice
is waived, at the close of business on the day next preceding the day
on which the meeting is held. A determination of stockholders of
record entitled to notice of or to vote at a meeting of stockholders
shall apply to any adjournment of the meeting; provided, however, that
the Board of Directors may fix a new record date for the adjourned
meeting.
(b) In order that the Corporation may determine the
stockholders entitled to consent to corporate action in writing
without a meeting, the Board of Directors may fix a record date, which
record date shall not precede the date upon which the resolution
fixing the record date is adopted by the Board of Directors. If no
record date has been fixed by the Board of Directors, the record date
for determining stockholders entitled to consent to corporate action
in writing without a meeting, when no prior action by the Board of
Directors is required, shall be the first date on which a signed
written consent setting forth
<PAGE>
the action taken or proposed to be taken is delivered to the
Corporation by delivery to its registered office in this State, its
principal place of business, or an officer or agent of the Corporation
having custody of the book in which proceedings of meetings of
stockholders are recorded. Delivery made to the Corporation's
registered office shall be by hand or by certified or registered mail,
return receipt requested. If no record date has been fixed by the
Board of Directors and prior action by the Board of Directors is
required by these by-laws, the record date for determining
stockholders entitled to consent to corporate action in writing
without a meeting shall be at the close of business on the day on
which the Board of Directors adopts the resolution taking such prior
action.
(c) In order that the Corporation may determine the
stockholders entitled to receive payment of any dividend or other
distribution or allotment of any rights or the stockholders entitled
to exercise any rights in respect of any change, conversion or
exchange of stock, or for the purpose of any other lawful action, the
Board of Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is
adopted. If no record date is fixed, the record date for determining
stockholders for any such purpose shall be at the close of business on
the day on which the Board of Directors adopts the resolution relating
thereto.
ARTICLE VI
Certificates Representing Stock
-------------------------------
SECTION 1. Certificates; Signatures. The shares of the
------------------------
Corporation shall be represented by certificates, provided that the
Board of Directors of the Corporation may provide by resolution or
resolutions that some or all of any or all classes or series of its
stock shall be uncertificated shares. Any such resolution shall not
apply to shares represented by a certificate until such certificate is
surrendered to the Corporation. Notwithstanding the adoption of such
a resolution by the Board of Directors, every holder of stock
represented by certificates and upon request every holder of
uncertificated shares shall be entitled to have a certificate, signed
by or in the name of the Corporation by the Chairman or Vice-Chairman
of the Board of Directors, or the President or Vice-President, and by
the Treasurer or an Assistant Treasurer, or the Secretary or an
Assistant Secretary of the Corporation, representing the number of
shares registered in certificate form. Any and all signatures
<PAGE>
on any such certificate may be facsimiles. In case any officer,
transfer agent or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be
such officer, transfer agent or registrar before such certificate is
issued, it may be issued by the Corporation with the same effect as if
he were such officer, transfer agent or registrar at the date of
issue. The name of the holder of record of the shares represented
thereby, with the number of such shares and the date of issue, shall
be entered on the books of the Corporation.
SECTION 2. Transfers of Stock. Upon compliance with
------------------
provisions restricting the transfer or registration of transfer of
shares of stock, if any, shares of capital stock shall be transferable
on the books of the Corporation only by the holder of record thereof
in person, or by duly authorized attorney, upon surrender and
cancellation of certificates for a like number of shares, properly
endorsed, and the payment of all taxes due thereon.
SECTION 3. Fractional Shares. The Corporation may, but
-----------------
shall not be required to, issue certificates for fractions of a share
where necessary to effect authorized transactions, or the Corporation
may pay in cash the fair value of fractions of a share as of the time
when those entitled to receive such fractions are determined, or it
may issue scrip in registered or bearer form over the manual or
facsimile signature of an officer of the Corporation or of its agent,
exchangeable as therein provided for full shares, but such scrip shall
not entitle the holder to any rights of a stockholder except as
therein provided.
The Board of Directors shall have power and authority to
make all such rules and regulations as it may deem expedient
concerning the issue, transfer and registration of certificates
representing shares of the Corporation.
SECTION 4. Lost, Stolen or Destroyed Certificates. The
--------------------------------------
Corporation may issue a new certificate of stock in place of any
certificate, theretofore issued by it, alleged to have been lost,
stolen or destroyed, and the Board of Directors may require the owner
of any lost, stolen or destroyed certificate, or his legal
representative, to give the Corporation a bond sufficient to indemnify
the Corporation against any claim that may be made against it on
account of the alleged loss, theft or destruction of any such
certificate or the issuance of any such new certificate.
<PAGE>
ARTICLE VII
Dividends
---------
Subject always to the provisions of law and the Certificate
of Incorporation, the Board of Directors shall have full power to
determine whether any, and, if any, what part of any, funds legally
available for the payment of dividends shall be declared as dividends
and paid to stockholders; the division of the whole or any part of
such funds of the Corporation shall rest wholly within the lawful dis-
cretion of the Board of Directors, and it shall not be required at any
time, against such discretion, to divide or pay any part of such funds
among or to the stockholders as dividends or otherwise; and before
payment of any dividend, there may be set aside out of any funds of
the Corporation available for dividends such sum or sums as the Board
of Directors from time to time, in its absolute discretion, thinks
proper as a reserve or reserves to meet contingencies, or for equal-
izing dividends, or for repairing or maintaining any property of the
Corporation, or for such other purpose as the Board of Directors shall
think conducive to the interest of the Corporation, and the Board of
Directors may modify or abolish any such reserve in the manner in
which it was created.
ARTICLE VIII
Ratification
------------
Any transaction, questioned in any law suit on the ground of
lack of authority, defective or irregular execution, adverse interest
of director, officer or stockholder, non-disclosure, miscomputation,
or the application of improper principles or practices of accounting,
may be ratified before or after judgment, by the Board of Directors or
by the stockholders, and if so ratified shall have the same force and
effect as if the questioned transaction had been originally duly
authorized. Such ratification shall be binding upon the Corporation
and its stockholders and shall constitute a bar to any claim or
execution of any judgment in respect of such questioned transaction.
<PAGE>
ARTICLE IX
Corporate Seal
--------------
The corporate seal shall have inscribed thereon the name of
the Corporation and the year of its incorporation, and shall be in
such form and contain such other words and/or figures as the Board of
Directors shall determine. The corporate seal may be used by
printing, engraving, lithographing, stamping or otherwise making,
placing or affixing, or causing to be printed, engraved, lithographed,
stamped or otherwise made, placed or affixed, upon any paper or
document, by any process whatsoever, an impression, facsimile or other
reproduction of said corporate seal.
<PAGE>
ARTICLE X
Fiscal Year
-----------
The fiscal year of the Corporation shall be fixed, and shall
be subject to change, by the Board of Directors. Unless otherwise
fixed by the Board of Directors, the fiscal year of the Corporation
shall be the calendar year.
ARTICLE XI
Waiver of Notice
----------------
Whenever notice is required to be given by these By-laws or
by the Certificate of Incorporation or by law, a written waiver
thereof, signed by the person or persons entitled to said notice,
whether before or after the time stated therein, shall be deemed
equivalent to notice.
ARTICLE XII
Bank Accounts, Drafts, Contracts, Etc.
--------------------------------------
SECTION 1. Bank Accounts and Drafts. In addition to such
------------------------
bank accounts as may be authorized by the Board of Directors, the
primary financial officer or any person designated by said primary
financial officer, whether or not an employee of the Corporation, may
authorize such bank accounts to be opened or maintained in the name
and on behalf of the Corporation as he may deem necessary or
appropriate, payments from such bank accounts to be made upon and
according to the check of the Corporation in accordance with the
written instructions of said primary financial officer, or other
person so designated by the Treasurer.
SECTION 2. Contracts. The Board of Directors may authorize
---------
any person or persons, in the name and on behalf of the Corporation,
to enter into or execute and deliver any and all deeds, bonds,
mortgages, contracts and other obligations or instruments, and such
authority may be general or confined to specific instances.
SECTION 3. Proxies; Powers of Attorney; Other Instruments.
---------------------------------- -----------
The Chairman, the President or any other person designated by either
of them shall have the power and authority to execute and deliver
proxies, powers of attorney and other
<PAGE>
instruments on behalf of the Corporation in connection with the rights
and powers incident to the ownership of stock by the Corporation. The
Chairman, the President or any other person authorized by proxy or
power of attorney executed and delivered by either of them on behalf
of the Corporation may attend and vote at any meeting of stockholders
of any company in which the Corporation may hold stock, and may
exercise on behalf of the Corporation any and all of the rights and
powers incident to the ownership of such stock at any such meeting, or
otherwise as specified in the proxy or power of attorney so
authorizing any such person. The Board of Directors, from time to
time, may confer like powers upon any other person.
SECTION 4. Financial Reports. The Board of Directors may
-----------------
appoint the primary financial officer or other fiscal officer and/or
the Secretary or any other officer and direct such officer to cause to
be prepared and furnished to stockholders entitled thereto any special
financial notice and/or financial statement, as the case may be, which
may be required by any provision of law.
ARTICLE XIII
Amendments
----------
The Board of Directors shall have power to adopt, amend or
repeal By-laws. By-laws adopted by the Board of Directors may be
repealed or changed, and new By-laws made, by the stockholders, and
the stockholders may prescribe that any By-law made by them shall not
be altered, amended or repealed by the Board of Directors.
NYFS06...:\47\41847\0008\1710\BYLD126M.530
Exhibit 3.2(n)(i)
<PAGE>
BYLAWS OF
DOLLAR FINANCIAL INSURANCE CORP.
--------------------------------
ARTICLE I - OFFICES
-------------------
Section 1-1. Registered Office. The registered office of
----------- -----------------
the Corporation shall be located within the Commonwealth of
Pennsylvania at such place as the Board of Directors (hereinafter
referred to as the "Board of Directors" or the "Board") shall
determine from time to time.
ARTICLE II - MEETINGS OF SHAREHOLDERS - ANNUAL
FINANCIAL STATEMENTS
----------------------------------------------
Section 2-1. Place of Meetings of Shareholders. Meetings
----------- ---------------------------------
of shareholders shall be held at such places, within or without the
Commonwealth of Pennsylvania, as may be fixed from time to time by the
Board of Directors. If no such place is fixed by the Board of
Directors, meetings of the shareholders shall be held at the
registered office of the Corporation.
Section 2-2. Annual Meeting of Shareholders.
----------- ------------------------------
(a) Time. A meeting of the shareholders of the
----
Corporation shall be held in each calendar year, commencing with the
year 1996, at such time as the Board of Directors may determine, or if
the Board of Directors fails to set a time, on the 18th day of August
at 10:00 o'clock a.m., if not a legal holiday, and if such is a legal
holiday, then such meeting shall be held on the next business day. If
the annual meeting is not
<PAGE>
called and held within six months after the designated time, any
shareholder may call the meeting at any time thereafter.
(b) Election of Directors. At such annual meeting,
---------------------
there shall be held an election of Directors.
Section 2-3. Special Meetings of Shareholders. Except as
----------- --------------------------------
expressly required by law, special meetings of the shareholders may be
called at any time only by:
(a) the Chairman of the Board, if any, if such officer
is serving as the chief executive officer of the Corporation, and
otherwise the President of the Corporation;
(b) the Board of Directors; or
(c) shareholders entitled to cast at least 20% of the
votes that all shareholders are entitled to cast at the particular
special meeting.
Upon the written request of any person who has called a
special meeting, under these Bylaws or applicable law, which request
specifies the general nature of the business to be transacted at such
meeting, it shall be the duty of the Secretary to fix the time and
place of such meeting, which shall be held not less than five nor more
than 60 days after the receipt of such request, and to give due notice
thereof as required by Section 2-4 hereof. If the Secretary neglects
or refuses to fix the time and place of such meeting, the person or
persons calling the meeting may do so.
<PAGE>
Section 2-4. Notices of Meetings of Shareholders. Written
----------- -----------------------------------
notice, complying with Article VI of these Bylaws, stating the place
and time and, in the case of special meetings, the general nature of
the business to be transacted at any meeting of the shareholders shall
be given to each shareholder of record entitled to vote at the
meeting, except as provided in Section 1707 of the Pennsylvania
Business Corporation Law of 1988, as amended (the "Pennsylvania BCL"),
at least five days prior to the day named for the meeting provided
that notice shall be given at least ten days prior to the day named
for a meeting to consider a fundamental change under Chapter 19 of the
Pennsylvania BCL. Such notices may be given by, or at the direction
of, the Secretary or other authorized person. If the Secretary or
other authorized person neglects or refuses to give notice of a
meeting, the person or persons call the meeting may do so.
Section 2-5. Quorum of and Action by Shareholders.
----------- ------------------------------------
(a) General Rule. Except as provided in subsections
------------
(c), (d) and (e) of this Section 2-5, the presence, in person or by
proxy, of shareholders entitled to cast at least a majority of the
votes that all shareholders are entitled to cast on a particular
matter to be acted upon at the meeting shall constitute a quorum for
the purpose of consideration and action on the matter. Unless the
Pennsylvania BCL permits otherwise,
<PAGE>
this Section 2-5(a) may be modified only by a Bylaw amendment adopted
by the shareholders.
(b) Action by Shareholders. Whenever any corporate
----------------------
action is to be taken by vote of the shareholders of the Corporation
at a duly organized meeting of shareholders, it shall be authorized by
a majority of the votes cast at the meeting by the holders of shares
entitled to vote thereon.
Unless the Pennsylvania BCL permits otherwise, this Section
2-5(b) may be modified only by a Bylaw amendment adopted by the
shareholders.
(c) Withdrawal. The shareholders present at a duly
----------
organized meeting can continue to do business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave less
than a quorum.
(d) Election of Directors at Adjourned Meetings. In
-------------------------------------------
the case of any meeting called for the election of Directors, those
shareholders who attend a meeting called for the election of Directors
that has been previously adjourned for lack of a quorum, although less
than a quorum as fixed in subsection (a), shall nevertheless
constitute a quorum for the purpose of electing Directors.
(e) Conduct of Other Business at Adjourned Meetings.
-----------------------------------------------
Those shareholders entitled to vote who attend a meeting of
shareholders that has been previously adjourned for
<PAGE>
one or more periods aggregating at least 15 days because of an absence
of a quorum, although less than a quorum as fixed in subsection (a),
shall nevertheless constitute a quorum for the purpose of acting upon
any matter set forth in the notice of the meeting if the notice states
that those shareholders who attend the adjourned meeting shall
nevertheless constitute a quorum for the purpose of acting upon the
matter.
Section 2-6. Adjournments.
----------- ------------
(a) General Rule. Adjournments of any regular or
------------
special meeting of shareholders may be taken, but any meeting at which
directors are to be elected shall be adjourned only from day to day,
or for such longer periods not exceeding 15 days each as the
shareholders present and entitled to vote shall direct, until the
directors have been elected.
(b) Lack of Quorum. If a meeting cannot be organized
--------------
because a quorum has not attended, those present may, except as
otherwise provided in this Section 2-6, adjourn the meeting to such
time and place as they may determine.
(c) Notice of an Adjourned Meeting. When a meeting of
------------------------------
shareholders is adjourned, it shall not be necessary to give any
notice of the adjourned meeting or of the business to be transacted at
an adjourned meeting, other than by announcement at the meeting at
which the adjournment is taken, unless the Board fixes a new record
date for the adjourned meeting.
<PAGE>
Section 2-7. Voting List, Voting and Proxies.
----------- -------------------------------
(a) Voting List. The officer or agent having charge
-----------
of the transfer books for shares of the Corporation shall make a
complete list of the shareholders entitled to vote at any meeting of
shareholders, arranged in alphabetical order, with the address of and
the number of shares held by each. The list shall be produced and
kept open at the time and place of the meeting and shall be subject to
the inspection of any shareholder during the whole time of the meeting
for the purposes thereof except that, if the Corporation has 5,000 or
more shareholders, in lieu of the making of the list the Corporation
may make the information therein available at the meeting by any other
means.
(b) Voting. Except as otherwise specifically provided
------
by law, all matters coming before the meeting shall be determined by a
vote of shares. Such vote shall be taken by voice unless a
shareholder demands, before the vote begins, that it be taken by
ballot.
(c) Proxies. At all meetings of shareholders,
-------
shareholders entitled to vote may attend and vote either in person or
by proxy. Every proxy shall be executed in writing by the shareholder
or by such shareholder's duly authorized attorney-in-fact and filed
with the Secretary of the Corporation. A proxy, unless coupled with
an interest (as defined in Section 1759(c) of the Pennsylvania BCL),
shall be revocable at will,
<PAGE>
notwithstanding any other agreement or any provision in the proxy to
the contrary, but the revocation of a proxy shall not be effective
until written notice thereof has been given to the Secretary of the
Corporation. An unrevoked proxy shall not be valid after three years
from the date of its execution unless a longer time is expressly
provided therein. A proxy shall not be revoked by the death or
incapacity of the maker unless, before the vote is counted or the
authority is exercised, written notice of the death or incapacity is
given to the Secretary of the Corporation.
(d) Judges of Election. In advance of any meeting of
------------------
shareholders of the Corporation, the Board of Directors may appoint
one or three Judges of Election, who need not be shareholders and who
will have such duties as provided in Section 1765(3) of the
Pennsylvania BCL, to act at the meeting or any adjournment thereof.
If one or three Judges of Election are not so appointed, the presiding
officer of the meeting may, and on the request of any shareholder
shall, appoint one or three Judges of Election at the meeting. In
case any person appointed as a Judge of Election fails to appear or
refuses to act, the vacancy may be filled by appointment made by the
Board of Directors in advance of the convening of the meeting or at
the meeting by the presiding officer. A person who is a candidate for
office to be filled at the meeting shall not act as a Judge
<PAGE>
of Election. Unless the Pennsylvania BCL permits otherwise, this
Section 2-7(d) may be modified only by a Bylaw amendment adopted by
the shareholders.
Section 2-8. Participation in Meetings by Conference
----------- ---------------------------------------
Telephone. Unless determined to the contrary by the Board of
---------
Directors in advance of a particular meeting with respect to that
meeting, any person who is otherwise entitled to participate in any
meeting of the shareholders may attend, be counted for the purposes of
determining a quorum and exercise all rights and privileges to which
such person might be entitled were such person personally in
attendance, including the right to vote, by means of conference
telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, if such
communications equipment is present in the meeting room.
Section 2-9. Action by Unanimous Consent of Shareholders.
----------- -------------------------------------------
Any action required or permitted to be taken at a meeting of the
shareholders or a class of shareholders may be taken without a meeting
if, prior or subsequent to the action, a consent or consents thereto
in writing (executed personally or by proxy), shall be signed by all
of the shareholders who would be entitled to vote at a meeting for
such purpose and shall be filed with the Secretary of the Corporation.
In addition to other means of filing with the Secretary, insertion in
the minute book
<PAGE>
of the Corporation shall be deemed filing with the Secretary
regardless of whether the Secretary or some other authorized person
has actual possession of the minute book.
Section 2-10. Action by Less than Unanimous Consent of
------------ ----------------------------------------
Shareholders. Any action required or permitted to be taken at a
------------
meeting of the shareholders or of a class of shareholders may be taken
without a meeting upon the written consent of shareholders have been
entitled to cast the minimum number of votes that would be necessary
to authorize the action at a meeting at which all shareholders
entitled to vote thereon were present and voting. The consents shall
be filed with the Secretary of the Corporation. In addition to other
means of filing with the Secretary, insertion in the minute book of
the Corporation shall be deemed filing with the Secretary regardless
of whether the Secretary or some other authorized person has actual
possession of the minute book. The action shall not become effective
until after at least ten days' written notice of such action shall
have been given to each shareholder entitled to vote thereon who has
not consented thereto.
Section 2-11. Annual Financial Statements. Unless
------------ ---------------------------
otherwise agreed between the Corporation and a shareholder, the
Corporation shall furnish to its shareholders annual financial
statements, including at least a balance sheet as of the end of each
fiscal year and statement of income and expenses for the
<PAGE>
fiscal year. The financial statements shall be prepared on the basis
of generally accepted accounting principles, if the Corporation
prepares financial statements for the fiscal year on that basis for
any purpose, and may be consolidated statements of the Corporation and
one or more of its subsidiaries.
The financial statements shall be mailed by the Corporation
to each of its shareholders entitled thereto within 120 days after the
close of each fiscal year and, after the mailing and upon request,
shall be mailed by the Corporation to any shareholder or beneficial
owner entitled thereto to whom a copy of the most recent annual
financial statements has not previously been mailed. Statements that
are audited or reviewed by a public accountant shall be accompanied by
the report of the account; in other cases, each copy shall be
accompanied by a statement of the person in charge of the financial
records of the Corporation (i) stating such person's reasonable belief
as to whether or not the financial statements were prepared in
accordance with generally accepted accounting principles and, if not,
describing the basis of presentation, and (ii) describing any material
respects in which the financial statements were not prepared on a
basis consistent with those prepared for the previous year.
<PAGE>
ARTICLE III - BOARD OF DIRECTORS
--------------------------------
Section 3-1.
-----------
(a) General Powers. Except as otherwise provided by
--------------
law and these Bylaws, all powers of the Corporation shall be exercised
by or under the authority of, and the business and affairs of the
Corporation shall be managed under the direction of the Board of
Directors. Unless the Pennsylvania BCL permits otherwise, this
Section 3-1(a) may be modified only by a Bylaw amendment adopted by
the shareholders.
(b) Number. The number of members of the Board of
------
Directors shall be the number of Directors serving at the time of
adoption of this Section 3-1, or such other number as may thereafter
from time to time (i) be determined by the Board of Directors, or (ii)
be set forth in a notice of a meeting of shareholders called for the
election of a full Board of Directors.
c) Vacancies. Each Director shall hold office until
---------
the expiration of the term for which he was selected and until his
successor has been selected and qualified or until his earlier death,
resignation or removal. Any vacancies on the Board of Directors,
including vacancies resulting from an increase in the number of
Directors, may be filled by a majority vote of the remaining members
of the Board (though less than a quorum) or by a sole remaining
Director or by the shareholders
<PAGE>
and each person so selected shall be a Director to serve for the
balance of the unexpired term.
(d) Removal. The entire Board of Directors or any
-------
individual Director may be removed from office without assigning any
cause by vote of shareholders. Notwithstanding the foregoing, if the
Board is classified with respect to the power to select Directors or
with respect to staggered terms as provided in Section 1724(b) of the
Pennsylvania BCL, the right of the shareholders to remove Directors
shall be governed by the provisions of Section 1726 of the
Pennsylvania BCL. An individual Director shall not be removed (unless
the entire board or class of the Board is removed) from the Board if
shareholders are entitled to vote cumulatively for the Board or a
class of the Board and if votes are cast against the resolution for
his removal which, if cumulatively voted at an annual or other regular
election of Directors, would be sufficient to elect one or more
Directors to the Board (or to the class). Unless the Pennsylvania BCL
permits otherwise, this Section 3-1(d) may be modified only by a Bylaw
amendment adopted by the shareholders.
(e) Qualification. A Director must be a natural
-------------
person at least 18 years of age.
Section 3-2. Place of Meetings. Meetings of the Board of
----------- -----------------
Directors may be held at such place within or without the Commonwealth
of Pennsylvania as a majority of the Directors
<PAGE>
may appoint from time to time or as may be designated in the notice of
the meeting.
Section 3-3. Regular Meetings. A regular meeting of the
----------- ----------------
Board of Directors shall be held annually, immediately following the
annual meeting of the shareholders, at the place where such meeting of
the shareholders is held or at such other place and time as a majority
of the Directors in office after the annual meeting of shareholders
may designate. At such meeting, the Board of Directors shall elect
officers of the Corporation. In addition to such regular meeting, the
Board of Directors shall have the power to fix by resolution the place
and time of other regular meetings of the Board.
Section 3-4. Special Meetings. Special meetings of the
----------- ----------------
Board of Directors shall be held whenever ordered by the Chairman of
the Board, if any, by the President, by a majority of the executive
committee, if any, or by a majority of the Directors in office.
Section 3-5. Participation in Meetings by Conference
----------- ---------------------------------------
Telephone. Any Director may participate in any meeting of the Board
---------
of Directors or of any committee (provided such Director is otherwise
entitled to participate), be counted for the purpose of determining a
quorum thereof and exercise all rights and privileges to which such
Director might be entitled were he or she personally in attendance,
including the right to vote, or any
<PAGE>
other rights attendant to presence in person at such meeting, by means
of conference telephone or similar communications equipment by means
of which all persons participating in the meeting can hear each other.
Section 3-6. Notices of Meetings of Board of Directors.
----------- -----------------------------------------
(a) Regular Meetings. No notice shall be required to
----------------
be given of any regular meeting, unless the same is held at other than
the place or time for holding such meeting as fixed in accordance with
Section 3-3 of these Bylaws, in which event five days' notice shall be
given of the place and time of such meeting complying with Article VI
of these Bylaws.
(b) Special Meetings. Written notice stating the
----------------
place and time of any special meeting of the Board of Directors shall
be sufficient if given at least one day, as provided in Article VI, in
advance of this time fixed for the meeting.
Section 3-7. Quorum; Action by the Board of Directors. A
----------- ----------------------------------------
majority of the Directors in office shall be necessary to constitute
a quorum for the transaction of business and the acts of a majority of
the Directors present and voting at a meeting at which a quorum is
present shall be the acts of the Board of Directors. If there is not
quorum present at a duly convened meeting of the Board of Directors,
the majority of those
<PAGE>
present may adjourn the meeting from time to time and place to place.
Section 3-8. Informal Action by the Board of Directors.
----------- -----------------------------------------
Any action required or permitted to be taken at a meeting of the
Directors, or of the members of any committee of the Board of
Directors, may be taken without a meeting if, prior or subsequent to
the action, a written consent or consents thereto by all of the
Directors in office (or members of the committee with respect to
committee action) is filed with the Secretary of the Corporation. In
addition to other means of filing with the Secretary, insertion in the
minute book of the Corporation shall be deemed filing with the
Secretary regardless of whether the Secretary or some other authorized
person has actual possession of the minute book.
Section 3-9. Committees.
----------- ----------
(a) Establishment and Powers. The Board of Directors
------------------------
of the Corporation may, by resolution adopted by a majority of the
Directors in office, establish one or more committees to consist of
one or more Directors of the Corporation. Any committee, to the
extent provided in the resolution of the Board of Directors or in the
Bylaws, shall have and may exercise all of the powers and authority of
the Board of Directors, except that a committee shall not have any
power or authority as to the following:
<PAGE>
(i) The submission to shareholders of any action
requiring approval of shareholders under Section 1731(a)(1) of the
Pennsylvania BCL.
(ii) The creation or filling of vacancies in the
Board of Directors.
(iii) The adoption, amendment or repeal of the
Bylaws.
(iv) The amendment or repeal of any resolution of
the Board of Directors that by its terms is amendable or repealable
only by the Board of Directors.
(v) Action on matters committed by the Bylaws or
resolution of the Board of Directors to another committee of the Board
of Directors.
(b) Alternate Members. The Board of Directors may
-----------------
designate one or more Directors as alternate members of any committee
who may replace any absent or disqualified member at any meeting of
the committee or for the purpose of any written action by the
committee. In the absence or disqualification of a member and
alternate member or members of a committee, the member or members
thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint
another Director to act at the meeting in the place of the absent or
disqualified member.
<PAGE>
(c) Term. Each committee of the Board of Directors
----
shall serve at the pleasure of the Board of Directors.
(d) Status of Committee Action. The term "Board of
--------------------------
Directors" or "Board", when used in any provision of these Bylaws
relating to the organization or procedures of or the manner of taking
action by the Board of Directors, shall be construed to include and
refer to any executive or other committee of the Board of Directors.
Any provision of these Bylaws relating or referring to action to be
taken by the Board of Directors or the procedure required therefor
shall be satisfied by the taking of corresponding action by a
committee of the Board of Directors to the extent authority to take
action has been delegated to the committee pursuant to this Section.
ARTICLE IV - OFFICERS
---------------------
Section 4-1. Election and Office. The Corporation shall
----------- -------------------
have a President, a Secretary and a Treasurer who shall be elected by
the Board of Directors. The Board of Directors may elect as
additional officers a Chairman of the Board, one or more Vice Chairmen
of the Board, one or more Vice Presidents, and one or more other
officers or assistant officers. Any number of offices may be held by
the same person. The President and the Secretary shall be natural
persons of the age of 18 years or older. The Treasurer may be a
corporation, but if a natural person shall be of the age of 18 years
or older.
<PAGE>
Section 4-2. Term. The officers and assistant officers
----------- ----
shall each serve at the pleasure of the Board of Directors until the
first meeting of the Board of Directors following the next annual
meeting of shareholders, unless removed from office by the Board of
Directors during their respective tenures. Officers may, but need
not, be Directors.
Section 4-3. Powers and Duties of President. Unless
----------- ------------------------------
otherwise determined by the Board of Directors, the President shall
have the usual duties of an executive officer with general supervision
over and direction of the affairs of the Corporation. The President
shall be the chief executive officer of the Corporation unless the
Chairman of the Board is serving as chief executive officer, in which
event the President shall be chief operating officer of the
Corporation. In the exercise of these duties and subject to the
actions of the Board of Directors, the President may appoint, suspend,
and discharge employees, agents and assistant officers, fix the
compensation of all officers and assistant officers, shall preside at
all meetings of the shareholders at which the President shall be
present and, unless there is a Chairman of the Board, shall preside at
all meetings of the Board of Directors. The President shall also do
and perform such other duties as from time to time may be assigned to
the President by the Board of Directors.
<PAGE>
Unless otherwise determined by the Board of Directors, the
President shall have full power and authority on behalf of the
Corporation to attend and to act and to vote at any meeting of the
shareholders of any corporation in which this Corporation may hold
stock and, at any such meeting, shall possess and may exercise any and
all rights and powers incident to the ownership of such stock and
which, as the owner thereof, the Corporation might have possessed and
exercised. The President shall also have the right to delegate such
power.
Section 4-4. Powers and Duties of the Secretary. Unless
----------- ----------------------------------
otherwise determined by the Board of Directors, the Secretary shall be
responsible for the keeping of the minutes of all meetings of the
Board of Directors and the shareholders, in books provided for that
purpose, and for the giving and serving of all notices for the
Corporation. The Secretary shall perform all other duties ordinarily
incident to the office of Secretary and shall have such other powers
and perform such other duties as may be assigned to the Secretary by
the Board of Directors. The minute books of the Corporation may be
held by a person other than the Secretary.
Section 4-5. Powers and Duties of the Treasurer. Unless
----------- ----------------------------------
otherwise determined by the Board of Directors, the Treasurer shall
have charge of all the funds and securities of the Corporation which
may come into such officer's hands. When
<PAGE>
necessary or proper, unless otherwise determined by the Board of
Directors, the Treasurer shall endorse for collection on behalf of the
Corporation checks, notes and other obligations, and shall deposit the
same to the credit of the Corporation to such banks or depositories as
the Board of Directors may designate and may sign all receipts and
vouchers for payments made to the Corporation. The Treasurer shall
sign all checks made by the Corporation, except when the Board of
Directors shall otherwise direct. The Treasurer shall be responsible
for the regular entry in books of the Corporation to be kept for such
purpose of a full and accurate account of all funds and securities
received and paid by the Treasurer on account of the Corporation.
Whenever required by the Board of Directors, the Treasurer shall
render a statement of the financial condition of the Corporation. The
Treasurer shall have such other powers and shall perform the duties as
may be assigned to such officer from time to time by the Board of
Directors. The Treasurer shall give such bond, if any, for the
faithful performance of the duties of such office as shall be required
by the Board of Directors.
Section 4-6. Powers and Duties of the Chairman of the
----------- ----------------------------------------
Board. Unless otherwise determined by the Board of Directors, the
-----
Chairman of the Board, if any, shall preside at all meetings of the
Directors. The Chairman of the Board shall have such other powers and
perform such further duties as may be assigned
<PAGE>
to such officer by the Board of Directors, including, without
limitation, acting as chief executive officer of the Corporation. To
be eligible to serve, the Chairman of the Board must be a Director of
the Corporation.
Section 4-7. Powers and Duties of Vice Chairmen of the
----------- -----------------------------------------
Board, Vice Presidents and Assistant Officers. Unless otherwise
---------------------------------------------
determined by the Board of Directors, each Vice Chairman, Vice
President and each assistant officer shall have the powers and perform
the duties of his or her respective superior officer. Vice Presidents
and assistant officers shall have such rank as may be designated by
the Board of Directors. Vice Presidents may be designated as having
responsibility for a specific area of the Corporation's affairs, in
which event such Vice President shall be superior to the other Vice
Presidents in relation to matters within his or her area. The
President shall be the superior officer of the Vice Presidents. The
Chairman of the Board shall be the superior officer of the Vice
Chairmen. The Treasurer and Secretary shall be the superior officers
of the Assistant Treasurers and Assistant Secretaries, respectively.
Unless otherwise determined by the Board of Directors, the
Executive Vice President shall have full power and authority on behalf
of the Corporation to attend and to act and to vote at any meeting of
the shareholders of any corporation in which this Corporation may hold
stock and, at any such meeting, shall
<PAGE>
possess and may exercise any and all the rights and powers incident to
the ownership of such stock and which, as the thereof, the Corporation
might have possessed and exercised. The Executive President shall
also have the right to delegate such power.
Section 4-8. Delegation of Office. The Board of Directors
----------- --------------------
may delegate the powers or duties of any officer of the Corporation to
any other person from time to time.
Section 4-9. Vacancies. The Board of Directors shall have
----------- ---------
the power to fill any vacancies in any office occurring for any
reason.
ARTICLE V - CAPITAL STOCK
-------------------------
Section 5-1. Share Certificates.
----------- ------------------
(a) Execution. Except as otherwise provided in
---------
Section 5-5, the shares of the Corporation shall be represented by
certificates. Unless otherwise provided by the Board of Directors,
every share certificate shall be signed by two officers and sealed
with the corporate seal, which may be a facsimile, engraved or
printed, but where such certificate is signed by a transfer agent or
registrar, the signature of any corporate officer upon such
certificate may be a facsimile, engraved or printed. In case any
officer who has signed, or whose facsimile signature has been place
upon, any share certificate shall have ceased to be such officer
because of
<PAGE>
death, resignation or otherwise, before the certificate is issued, it
may be issued with the same effect as if the officer had not ceased to
be such at the date of its issue. The provisions of this Section 5-1
shall be subject to any inconsistent or contrary agreement at the time
between the Corporation and any transfer agent or registrar.
(b) Designations, etc. To the extent the Corporation
-----------------
is authorized to issue shares of more than one class or series, every
certificate shall set forth upon the face or back of the certificate
(or shall state on the face or back of the certificate that the
Corporation will furnish to any shareholder upon request and without
charge) a full or summary statement of the designations, voting
rights, preferences, limitations and special rights of the shares of
each class or series authorized to be issued so far as they have been
fixed and determined and the authority of the Board of Directors to
fix and determine the designations, voting rights, preferences,
limitations and special rights of the classes and series of shares of
the Corporation.
(c) Fractional Shares. Except as otherwise determined
-----------------
by the Board of Directors, shares or certificates therefor may be
issued as fractional shares for shares held by any dividend
reinvestment plan or employee benefit plan created
<PAGE>
or approved by the Corporation's Board of Directors, but not by any
other person.
Section 5-2. Transfer of Shares. Transfer of shares shall
----------- ------------------
be made on the books of the Corporation only upon surrender of the
share certificate, duly endorsed or with duly executed stock powers
attached and otherwise in proper form for transfer, which certificate
shall be cancelled at the time of the transfer.
Section 5-3. Determination of Shareholders of Record.
----------- ---------------------------------------
(a) Fixing Record Date. The Board of Directors of the
------------------
Corporation may fix a time prior to the date of any meeting of
shareholders as a record date for the determination of the
shareholders entitled to notice of, or to vote at, the meeting, which
time, except in the case of an adjourned meeting, shall be not more
than 90 days prior to the date of the meeting of shareholders. Only
shareholders of record on the date fixed shall be so entitled
notwithstanding any transfer of shares on the books of the Corporation
after any record date fixed as provided in this subsection. The Board
of Directors may similarly fix a record date for the determination of
shareholders of record for any other purpose. When a determination of
shareholders of record has been made as provided in this section for
purposes of a meeting, the determination shall apply to any
adjournment thereof unless the Board of Directors fixes a new record
date for the adjourned meeting.
<PAGE>
(b) Determination When No Record Date Fixed. If a
---------------------------------------
record date is not fixed:
(i) The record date for determining shareholders
entitled to notice of or to vote at a meeting of shareholders shall be
at the close of business on the day next preceding the day on which
notice is given or, if notice is waived, at the close of business on
the day immediately preceding the day on which the meeting is held.
(ii) The record date for determining shareholders
entitled to express consent or dissent to corporate action in writing
without a meeting, when prior action by the Board of Directors is not
necessary, shall be the close of business on the day on which the
first written consent or dissent is filed with the Secretary of the
Corporation.
(iii) The record date for determining shareholders
for any other purpose shall be at the close of business on the day on
which the Board of Directors adopts the resolution relating thereto.
(c) Certification by Nominee. The Board of Directors
------------------------
may adopt a procedure whereby a shareholder of the Corporation may
certify in writing to the Corporation that all or a portion of the
shares registered in the name of the shareholder are held for the
account of a specified person or persons. The resolution of the Board
of Directors may set forth:
<PAGE>
(i) the classification of shareholder who may
certify;
(ii) the purpose or purposes for which the
certification may be made;
(iii) the form of certification and information to
be contained therein;
(iv) if the certification is with respect to a
record date, the time after the record date within which the
certification must be received by the Corporation; and
(v) such other provisions with respect to the
procedure as are deemed necessary or desirable.
Upon receipt by the Corporation of a certification
complying with the procedure, the persons specified in the
certification shall be deemed, for the purposes set forth in the
certification, to be the holders of record of the number of shares
specified in place of the shareholder making the certification.
Section 5-4. Lost Share Certificates. Unless waived in
----------- -----------------------
whole or in part by the Board of Directors, any person requesting the
issuance of a new certificate in lieu of an alleged lost, destroyed,
mislaid or wrongfully taken certificate shall (a) give to the
Corporation his or her bond of indemnity with an acceptable surety,
and (b) satisfy such other requirements as may be imposed by the
Corporation. Thereupon, a
<PAGE>
new share certificate shall be issued to the registered owner or his
or her assigns in lieu of the alleged lost, destroyed, mislaid or
wrongfully taken certificate, provided that the request therefor and
issuance thereof have been made before the Corporation has notice that
such shares have been acquired by a bona fide purchaser.
Section 5-5. Uncertificated Shares. Notwithstanding
----------- ---------------------
anything herein to the contrary, any or all classes and series of
shares, or any part thereof, may be represented by uncertificated
shares to the extent determined by the Board of Directors, except that
shares represented by a certificate that is issued and outstanding
shall continue to be represented thereby until the certificate is
surrendered to the Corporation. Within a reasonable time after the
issuance or transfer of uncertificated shares, the Corporation shall
send to the registered owner thereof, a written notice containing the
information required to be set forth or stated on certificates. The
rights and obligations of the holders of shares represented by
certificates and the rights and obligations of the holders of
uncertificated shares of the same class and series shall be identical.
Notwithstanding anything herein to the contrary, the provisions of
Section 5-2 shall be inapplicable to uncertificated shares and in lieu
thereof the Board of Directors shall adopt alternative procedures for
registration of transfers.
<PAGE>
ARTICLE VI - NOTICES - COMPUTING TIME PERIODS
---------------------------------------------
Section 6-1. Contents of Notice. Whenever any notice of a
----------- ------------------
meeting is required to be given pursuant to these Bylaws or the
Articles of Incorporation (the "Articles") or otherwise, the notice
shall specify the place and time of the meeting; in the case of a
special meeting of shareholders or where otherwise required by law or
the Bylaws, the general nature of the business to be transacted at
such meeting; and any other information required by law.
Section 6-2. Method of Notice. Whenever written notice is
----------- ----------------
required to be given to any person under the provisions of the
Articles or these Bylaws, it may be given to the person either
personally or by sending a copy thereof by first class or express
mail, postage prepaid, or by telegram (with messenger service
specified), telex or TWX (with answer back received) or courier
services, charges prepaid, or by telecopier, to such person's address
(or to such person's telex, TWX, telecopier or telephone number)
appearing on the books of the Corporation or, in the case of
Directors, supplied by such Director to the Corporation for the
purpose of notice. If the notice is sent by mail, telegraph or
courier service, it shall be deemed to have been given to the person
entitled thereto when deposited in the United States mail or with a
telegraph office or courier service for deliver to that person or, in
the case of telex or TWX, when
<PAGE>
dispatched. Except as otherwise provided herein, or as otherwise
directed by the Board of Directors, notices of meetings may be given
by, or at the direction of, the Secretary.
Section 6-3. Computing Time Periods.
----------- ----------------------
(a) Days to be Counted. In computing the number of
------------------
days for purposes of these Bylaws, all days shall be counted,
including Saturdays, Sundays or a holiday on which national banks are
or may elect to be closed ("Holiday"); provided, however, that if the
final day of any time period falls on a Saturday, Sunday or Holiday,
then the final day shall be deemed to be the next day which is not a
Saturday, Sunday or Holiday. In computing the number of days for the
purpose of giving notice of any meeting, the date upon which the
notice is given shall be counted but the day set for the meeting shall
not be counted.
(b) One Day Notice. IN any case where only one day's
--------------
notice is being given, notice must be given at least 24 hours in
advance by delivery in person, telephone, telex, TWX, telecopier or
similar means of communication.
Section 6-4. Waiver of Notice. Whenever any notice is
----------- ----------------
required to be given by law or the Articles or the Bylaws, a waiver
thereof in writing, signed by the person or persons entitled to the
notice, whether before or after the time stated therein, shall be
deemed equivalent to the giving of the notice. Except as otherwise
required by law or the next sentence, neither
<PAGE>
the business to be transacted at, nor the purpose of, a meeting need
be specified in the waiver of notice of the meeting. In the case of a
special meeting of shareholders, the waiver of notice shall specify
the general nature of the business to be transacted. Attendance of a
person at any meeting shall constitute a waiver of notice of the
meeting except where a person attends a meeting for the express
purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting was not lawfully
called or convened.
ARTICLE VII - LIMITATION OF DIRECTORS' LIABILITY AND
INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHER PERSONS
--------------------------------------------------------
Section 7-1. Limitation of Directors' Liability. No
----------- ----------------------------------
Director of the Corporation shall be personally liable for monetary
damages as such for any action taken or any failure to take any action
unless: (a) the Director has breached or failed to perform the duties
of his or her office under Section 1721 of the Pennsylvania BCL, and
(b) the breach or failure to perform constitutes self-dealing, wilful
misconduct or recklessness; provided, however, that the provisions of
this Section shall not apply to the responsibility or liability of a
Director pursuant to any criminal statute, or to the liability of a
Director for the payment of taxes pursuant to local, Pennsylvania or
Federal law.
<PAGE>
Section 7-2. Indemnification and Insurance.
----------- -----------------------------
(a) Indemnification of Directors and Officers.
-----------------------------------------
(i) Each Indemnitee (as defined below) shall be
indemnified and held harmless by the Corporation for all actions taken
by him or her and for all failures to take action (regardless of the
date of any such action or failure to take such action) to the fullest
extent permitted by Pennsylvania law against all expense, liability
and loss (including without limitation attorneys fees, judgments,
fines, taxes, penalties, and amounts paid or to be paid in settlement)
reasonably incurred or suffered by the Indemnitee in connection with
any Proceeding (as defined below). No indemnification pursuant to
this Section shall be made, however, in any case where the act or
failure to act giving rise to the claim for indemnification is
determined by a court to have constituted wilful misconduct or
recklessness.
(ii) The right to indemnification provided in
this Section shall include the right to have the expenses incurred by
the Indemnitee in defending any Proceeding paid by the Corporation in
advance of the final disposition of the Proceeding to the fullest
extent permitted by Pennsylvania law; provided that, if Pennsylvania
law continues so to require, the payment of such expenses incurred by
the Indemnitee in advance of the final disposition of a Proceeding
shall be made only upon delivery to the Corporation of an undertaking,
by or on behalf of
<PAGE>
the Indemnitee, to repay all amounts so advanced without interest if
it shall ultimately be determined that the Indemnitee is not entitled
to be indemnified under this Section or otherwise.
(iii) Indemnification pursuant to this Section
shall continue as to an Indemnitee who has ceased to be a Director or
officer and shall inure to the benefit of his or her heirs, executors
and administrators.
(iv) For purposes of this Article, (A)
"Indemnitee" shall mean each Director or officer of the Corporation
who was or is a party to, or is threatened to be made a party to, or
is otherwise involved in, any Proceeding, by reason of the fact that
he or she is or was a Director or officer of the Corporation or is or
was serving in any capacity at the request or for the benefit of the
Corporation as a Director, officer, employee, agent, partner, or
fiduciary of, or in any other capacity for, another corporation or any
partnership, joint venture, trust, employee, benefit plan, or other
enterprise; and (B) "Proceeding" shall mean any threatened, pending or
completed action, suit or proceeding (including without limitation an
action, suit or proceeding by or in the right of the Corporation),
whether civil, criminal, administrative, investigative or through
arbitration.
(b) Indemnification of Employees and Other Persons.
----------------------------------------------
The Corporation may, by action of its Board of
<PAGE>
Directors and to the extent provided in such action, indemnify
employees and other persons as though they were Indemnitees. To the
extent that an employee or agent of the Corporation has been
successful on the merits or otherwise in defense of any Proceeding or
in defense of any claim, issue or matter therein, the Corporation
shall indemnify such person against expenses (including attorneys'
fees) actually and reasonably incurred by such person in connection
therewith.
(c) Non-Exclusivity of Rights. The rights to
-------------------------
indemnification and to the advancement of expenses provided in this
Article shall not be exclusive of any other rights that any person may
have or hereafter acquire under any statute, provision of the Articles
or Bylaws, agreement, vote of shareholders or Directors, or otherwise.
(d) Insurance. The Corporation may purchase and
---------
maintain insurance, at its expense, for the benefit of any person on
behalf of whom insurance is permitted to be purchased by Pennsylvania
law against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person under
Pennsylvania or other law. The Corporation may also purchase and
maintain insurance to insure its indemnification obligations whether
arising hereunder or otherwise.
(e) Fund For Payment of Expenses. The Corporation may
----------------------------
create a fund of any nature, which may, but need
<PAGE>
not be, under the control of a trustee, or otherwise may secure in any
manner its indemnification obligations, whether arising hereunder,
under the Articles, by agreement, vote of shareholders or Directors,
or otherwise.
Section 7-3. Amendment. The provisions of this Article
----------- ---------
VII relating to the limitation of Directors' liability, to
indemnification and to the advancement of expenses shall constitute a
contract between the Corporation and each of its Directors and
officers which may be modified as to any Director or officer only with
that person's consent or as specifically provided in this Section.
Notwithstanding any other provision of these Bylaws relating to their
amendment generally, any repeal or amendment of this Article VII which
is adverse to any Director or officer shall apply to such Director or
officer only on a prospective basis, and shall not reduce any
limitation on the personal liability of a Director of the Corporation,
or limit the rights of an Indemnitee to indemnification or to the
advancement of expenses with respect to any action or failure to act
occurring prior to the time of such repeal or amendment.
Notwithstanding any other provision of these Bylaws, no repeal or
amendment of these Bylaws shall affect any or all of this Article so
as either to reduce the limitation of Directors' liability or limit
indemnification or the advancement of expenses in any manner unless
adopted by (a) the unanimous vote of the Directors
<PAGE>
of the Corporation then serving, or (b) the affirmative vote of
shareholders entitled to cast not less than a majority of the votes
that all shareholders are entitled to cast in the election of
Directors; provided that no such amendment shall have retroactive
effect inconsistent with the preceding sentence.
Section 7-4. Changes in Pennsylvania Law. References in
----------- ---------------------------
this Article VII to Pennsylvania law or to any provision thereof shall
be to such law as it existed on the date this Article VII was adopted
or as such law thereafter may be changed; provided that (a) in the
case of any change which expands the liability of Directors or limits
the indemnification rights or the rights to advancement of expenses
which the Corporation may provide, the rights to limited liability, to
indemnification and to the advancement of expenses provided in this
Article shall continue as theretofore to the extent permitted by law;
and (b) if such change permits the Corporation without the requirement
of any further action by shareholders or Directors to limit further
the liability of Directors (or limit the liability of officers) or to
provide broader indemnification rights or rights to the advancement of
expenses that the Corporation was permitted to provide prior to such
change, then liability thereupon shall be so limited and the rights to
indemnification and the advancement of expenses shall be so broadened
to the extent permitted by law.
<PAGE>
ARTICLE VIII - FISCAL YEAR
--------------------------
Section 8-1. Determination of Fiscal Year. The Board of
------------ ----------------------------
Directors shall have the power by resolution to fix the fiscal year of
the Corporation. If the Board of Directors shall fail to do so, the
President shall fix the fiscal year.
ARTICLE IX - AMENDMENTS
-----------------------
Section 9-1. Except as otherwise expressly provided in
-----------
Section 7-3:
(a) Shareholders. The shareholders entitled to vote
------------
thereon shall have the power to alter, amend, or repeal these Bylaws,
by the vote of shareholders entitled to cast at least a majority of
the votes which all shareholders are entitled to cast thereon, at any
regular or special meeting, duly convened after notice to the
shareholders of such purpose. In the case of a meeting of
shareholders to amend or repeal these Bylaws, written notice shall be
given to each shareholder that the purpose, or one of the purposes, of
the meeting is to consider the adoption, amendment or repeal of the
Bylaws.
(b) Board of Directors. The Board of Directors (but
------------------
not a committee thereof), by a vote of the majority of Directors then
in office, shall have the power to alter, amend, and repeal these
Bylaws, regardless of whether the shareholders have previously adopted
the Bylaw being amended or repealed, subject to the power of the
shareholders to change such action,
<PAGE>
provided that the Board of Directors shall not have the power to amend
these Bylaws on any subject that is expressly committed to the
shareholders by the express terms hereof by Section 1504 of the
Pennsylvania BCL or otherwise.
ARTICLE X - INTERPRETATION OF BYLAWS -- SEPARABILITY
----------------------------------------------------
Section 10-1. Interpretation. All words, terms and
------------ --------------
provisions of these Bylaws shall be interpreted and defined by and in
accordance with the Pennsylvania BCL.
Section 10-2. Separability. The provisions of these Bylaws
------------ ------------
are independent of and separable from each other, and no provision
shall be affected or rendered invalid or unenforceable by virtue of
the fact that for any reason any other or others of them may be
invalid or unenforceable in whole or in part.
ARTICLE XI - DETERMINATIONS BY THE BOARD
----------------------------------------
Section 11-1. Effect of Board Determinations. Any
------------ ------------------------------
determination involving interpretation or application of these Bylaws
made in good faith by the Board of Directors shall by final, binding
and conclusive on all parties in interest.
NYFS06...:\47\41847\0008\1710\ARTD126K.290
Exhibit 3.2(o)(i)
<PAGE>
BY-LAWS OF
DOLLAR INSURANCE ADMINISTRATION CORP.
--------------------------------------
ARTICLE I - OFFICES
--------------------
Section 1-1. Registered Office and Registered Agent. The
----------- --------------------------------------
Corporation shall maintain a registered office and registered agent
within the State of Delaware, which may be changed by the Board of
Directors from time to time determine.
Section 1-2. Other Offices. The Corporation may also have
----------- -------------
offices at such other places, within or without the State of Delaware,
as the Board of Directors may from time to time
ARTICLE II - STOCKHOLDERS' MEETINGS
------------------------------------
Section 2-1. Place of Stockholders' Meetings. Meetings of
----------- -------------------------------
stockholders may be held at such place, either within or without the
State of Delaware, as may be designated by the Board of Directors from
time to time. If no such place is designated by the Board of
Directors, meetings of the stockholders shall be held at the
registered office of the Corporation in the State of Delaware.
Section 2-2. Annual Meeting. A meeting of the
----------- --------------
stockholders of the Corporation shall be held in each calendar year,
commencing with the year 1996, on the 18th day of August at 10:00
o'clock a.m. if not a legal holiday, and if such day is a
<PAGE>
legal holiday, then such meeting shall be held on the next business
day.
At such annual meeting, there shall be held an election for
a Board of Directors to serve for the ensuing year and until their
respective successors are elected and qualified, or until their
earlier resignation or removal.
Unless the Board of Directors shall deem it advisable,
financial reports of the Corporation's business need not be sent to
the stockholders and need not be presented at the annual meeting. If
any report is deemed advisable by the Board of Directors, such report
may contain such information as the Board of Directors shall determine
and need not be certified by a Certified Public Accountant unless the
Board of Directors shall so direct.
Section 2-3. Special Meetings. Except as otherwise
----------- ----------------
specifically provided by law, special meetings of the stockholders may
be called at any time:
(a) By the Board of Directors; or
(b) By the President of the Corporation; or
(c) By the holders of record of not less than a majority of
all the shares outstanding and entitled to vote.
Upon the written request of any person entitled to call a
special meeting, which request shall set forth the purpose for which
the meeting is desired, it shall be the duty of the
<PAGE>
Secretary to give prompt written notice of such meeting to be held at
such time as the Secretary may fix, subject to the provisions of
Section 2-4 hereof. If the Secretary shall fail to fix such date and
give notice within ten (10) days after receipt of such request, the
person or persons making such request may do so.
Section 2-4. Notice of Meetings and Adjourned Meetings.
----------- -----------------------------------------
Written notice stating the place, date and hour of any meeting shall
be given not less than ten (10) nor more than sixty (60) days before
the date of the meeting to each stockholder entitled to vote at such
meeting. If mailed, notice is given when deposited in the United
States Mail, postage prepaid, directed to the stockholder at his
address as it appears on the records of the Corporation. Such notice
may be given by or at the direction of the person or persons
authorized to call the meeting.
When a meeting is adjourned to another time or place, notice
need not be given of the adjourned meeting if the time and place
thereof are announced at the meeting at which the adjournment is
taken. If the adjournment is for more than thirty (30) days, or if
after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
<PAGE>
Section 2-5. Quorum. Unless otherwise provided in the
----------- ------
Certificate of Incorporation or in a By-law adopted by the
stockholders or by the Board of Directors (or the Incorporators if no
first Directors were named in the Certificate of Incorporation) at its
organization meeting following the filing of the Articles of
Incorporation, the presence, in person or by proxy, of the holders of
a majority of the outstanding shares entitled to vote shall constitute
a quorum but in no event shall a quorum consist of less than one-third
(1/3) of the shares entitled to vote at a meeting. The stockholders
present at a duly organized meeting can continue to do business until
adjournment, notwithstanding the withdrawal of enough stockholders to
leave less than a quorum. If a meeting cannot be organized because of
the absence of a quorum, those present may, except as otherwise
provided by law, adjourn the meeting to such time and place as they
may determine. In the case of any meeting for the election of
Directors, those stockholders who attend the second of such adjourned
meetings, although less than a quorum as fixed in this Section, shall
nevertheless constitute a quorum for the purpose of electing
Directors.
Section 2-6. Voting List; Proxies. The officer who has
----------- --------------------
charge of the stock ledger of the Corporation shall prepare and make,
at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to
<PAGE>
vote at the meeting, arranged in alphabetical order, and showing the
address of each stockholder and the number of shares registered in the
name of each stockholder. Such list shall be open to the examination
of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten (10) days prior
to the meeting, either at a place within the city where the meeting is
to be held, which place shall be specified in the notice of the
meeting, or, if not so specified at the place where the meeting is to
be held. The list shall also be produced and kept at the time and
place of the meeting during the whole time thereof, and may be
inspected by any stockholder who is present.
Upon the willful neglect or refusal of the Directors to
produce such a list at any meeting for the election of Directors, they
shall be ineligible to any office at such meeting.
Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in
writing without a meeting may authorize another person or persons to
act for him by proxy. All proxies shall be executed in writing and
shall be filed with the Secretary of the Corporation not later than
the day on which exercised. No proxy shall be voted or acted upon
after three (3) years from its date, unless the proxy provides for a
longer period.
<PAGE>
Except as otherwise specifically provided by law, all
matters coming before the meeting shall be determined by a vote by
shares. All elections of Directors shall be by written ballot unless
otherwise provided in the Certificate of Incorporation. Except as
otherwise specifically provided by law, all other votes may be taken
by voice unless a stockholder demands that it be taken by ballot, in
which latter event the vote shall be taken by written ballot.
Section 2-7. Informal Action by Stockholders. Unless
----------- -------------------------------
otherwise provided by the Certificate of Incorporation, any action
required to be taken at any annual or special meeting of stockholders,
or any action which may be taken at any annual or special meeting of
such stockholders, may be taken without a meeting, without prior
notice and without a vote, if a consent in writing, setting forth the
action so taken, shall be signed by the holders of outstanding stock
having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all
shares entitled to vote thereon were present and voted.
Prompt notice of the taking of corporate action without a
meeting by less than unanimous written consent shall be given to those
stockholders or members, who have not consented in writing.
<PAGE>
ARTICLE III - BOARD OF DIRECTORS
---------------------------------
Section 3-1. Number. The business and affairs of the
----------- ------
Corporation shall be managed by a Board of two (2) Directors.
Section 3-2. Place of Meeting. Meetings of the Board of
----------- ----------------
Directors may be held at such place either within or without the State
of Delaware, as a majority of the Directors may from time to time
designate or as may be designated in the notice calling the meeting.
Section 3-3. Regular Meetings. A regular meeting of the
----------- ----------------
Board of Directors shall be held annually, immediately following the
annual meeting of stockholders, at the place where such meeting of the
stockholders is held or at such other place, date and hour as a
majority of the newly elected Directors may designate. At such
meeting the Board of Directors shall elect officers of the
Corporation. In addition to such regular meeting, the Board of
Directors shall have the power to fix, by resolution, the place, date
and hour of other regular meetings of the Board.
Section 3-4. Special Meetings. Special meetings of the
----------- ----------------
Board of Directors shall be held whenever ordered by the President, by
a majority of the members of the executive committee, if any, or by a
majority of the Directors in office.
<PAGE>
Section 3-5. Notices of Meetings of Board of Directors.
----------- -----------------------------------------
(a) Regular Meetings. No notice shall be required to
----------------
be given of any regular meeting, unless the same be held at other than
the time or place for holding such meetings as fixed in accordance
with Section 3-3 of these by-laws, in which event one (1) day's notice
shall be given of the time and place of such meeting.
(b) Special Meetings. At least one (1) day's notice
----------------
shall be given of the time, place and purpose for which any special
meeting of the Board of Directors is to be held.
Section 3-6. Quorum. A majority of the total number of
----------- ------
Directors shall constitute a quorum for the transaction of business,
and the vote of a majority of the Directors present at a meeting at
which a quorum is present shall be the act of the Board of Directors.
If there be less than a quorum present, a majority of those present
may adjourn the meeting from time to time and place to place and shall
cause notice of each such adjourned meeting to be given to all absent
Directors.
Section 3-7. Informal Action by the Board of Directors.
----------- -----------------------------------------
Any action required or permitted to be taken at any meeting of the
Board of Directors, or of any committee thereof, may be taken without
a meeting if all members of the Board or committee, as the case may
be, consent thereto in writing, and
<PAGE>
the writing or writings are filed with the minutes of proceedings of
the Board or committee.
Section 3-8. Powers.
----------- ------
(a) General Powers. The Board of Directors shall have
--------------
all powers necessary or appropriate to the management of the business
and affairs of the Corporation, and, in addition to the power and
authority conferred by these by-laws, may exercise all powers of the
Corporation and do all such lawful acts and things as are not by
statute, these by-laws or the CertIficate of Incorporation directed or
required to be exercised or done by the stockholders.
(b) Specific Powers. Without limiting the general
---------------
powers conferred by the last preceding clause and the powers conferred
by the Certificate of Incorporation and by-laws of the Corporation, it
is hereby expressly declared that the Board of Directors shall have
the following powers:
(i) To confer upon any officer or officers of the
Corporation the power to choose, remove or suspend assistant officers,
agents or servants.
(ii) To appoint any person, firm or corporation to
accept and hold in trust for the Corporation any property belonging to
the Corporation or in which it is interested, and to authorize any
such person, firm or corporation
<PAGE>
to execute any documents and perform any duties that may be requisite
in relation to any such trust.
(iii) To appoint a person or persons to vote
shares of another corporation held and owned by the Corporation.
(iv) By resolution adopted by a majority of the
full Board of Directors, to designate one (1) or more of its number to
constitute an executive committee which, to the extent provided in
such resolution, shall have and may exercise the power of the Board of
Directors in the management of the business and affairs of the
Corporation and may authorize the seal of the Corporation to be
affixed.
(v) By resolution passed by a majority of the
whole Board of Directors, to designate one (1) or more additional
committees, each to consist of one (1) or more Directors, to have such
duties, powers and authority as the Board of Directors shall
determine. All committees of the Board of Directors, including the
executive committee, shall have the authority to adopt their own rules
of procedure. Absent the adoption of specific procedures, the
procedures applicable to the Board of Directors shall also apply to
committees thereof.
(vi) To fix the place, time and purpose of
meetings of stockholders.
(vii) To purchase or otherwise acquire for the
Corporation any property, rights or privileges which the
<PAGE>
Corporation is authorized to acquire, at such prices, on such terms
and conditions and for such consideration as it shall from time to
time see fit, and, at its discretion, to pay any property or rights
acquired by the Corporation, either wholly or partly in money or in
stocks, bonds, debentures or other securities of the Corporation.
(viii) To create, make and issue mortgages,
bonds, deeds of trust, trust agreements and negotiable or transferable
instruments and securities, secured by mortgage or otherwise, and to
do every other act and thing necessary to effectuate the same.
(ix) To appoint and remove or suspend such
subordinate officers, agents or servants, permanently or temporarily,
as it may from time to time think fit, and to determine their duties,
and fix, and from time to time change, their salaries or emoluments,
and to require security in such instances and in such amounts as it
thinks fit.
(x) To determine who shall be authorized on the
Corporation's behalf to sign bills, notes, receipts, acceptances,
endorsements, checks, releases, contracts and documents.
Section 3-9. Compensation of Directors. Compensation of
----------- -------------------------
Directors and reimbursement of their expenses incurred in connection
with the business of the Corporation, if any, shall be
<PAGE>
as determined from time to time by resolutIon of the Board of
Directors.
Section 3-10. Removal of Directors by Stockholders. The
------------ ------------------------------------
entire Board of Directors or any individual Director may be removed
from office without assigning any cause by a majority vote of the
holders of the outstanding shares entitled to vote. In case the Board
of Directors or any one (1) or more Directors be so removed, new
Directors may be elected at the same time.
Section 3-11. Resignations. Any Director may resign at any
---------------------------
time by submitting his written resignation to the Corporation. Such
resignation shall take effect at the time of its receipt by the
Corporation unless another time be fixed in the resignation, in which
case it shall become effective at the time so fixed. The acceptance
of a resignation shall not be required to make it effective.
Section 3-12. Vacancies. Vacancies and new created
------------ ---------
directorships resulting from any increase in the authorized number of
Directors elected by all of the stockholders having the right to vote
as a single class may be filled by a majority of the Directors then in
office, although less than a quorum, or by a sole remaining Director,
and each person so elected shall be a Director until his successor is
elected and qualified or until his earlier resignation or removal.
<PAGE>
Section 3-13. Participation by Conference Telephone.
------------ -------------------------------------
Directors may participate in regular or special meetings of the Board
by telephone or similar communications equipment by means of which all
other persons participating in the meeting can hear each other, and
such participation shall constitute presence at the meeting.
ARTICLE IV - OFFICERS
----------------------
Section 4-1. Election and Office. The Corporation shall
----------- -------------------
have a President, a Secretary and a Treasurer who shall be elected by
the Board of Directors. The Board of Directors may elect such
additional officers as it may deem proper, including a Chairman and a
Vice Chairman of the Board of Directors, one (1) or more Vice
Presidents, and one (1) or more assistant or honorary officers. Any
number of offices may be held by the same person.
Section 4-2. Term. The President, the Secretary and the
----------- ----
Treasurer shall each serve for a term of one (1) year and until their
respective successors are chosen and qualified, unless removed from
office by the Board of Directors during their respective tenures. The
term of office of any other officer shall be as specified by the Board
of Directors.
Section 4-3. Powers and Duties of the President. Unless
------------ ----------------------------------
otherwise determined by the Board of Directors, the President shall
have the usual duties of an executive officer
<PAGE>
with general supervision over and direction of the affairs of the
Corporation. In the exercise of these duties and subject to the
limitations of the laws of the State of Delaware, these by-laws, and
the actions of the Board of Directors, he may appoint, suspend and
discharge employees and agents, shall preside at all meetings of the
stockholders at which he shall be present, and, unless there is a
Chairman of the Board of Directors, shall preside at all meetings of
the Board of Directors and, unless otherwise specified by the Board of
Directors, shall be a member of all committees. He shall also do and
perform such other duties as from time to time may be assigned to him
by the Board of Directors.
Unless otherwise determined by the Board of Directors, the
President shall have full power and authority on behalf of the
Corporation to attend and to act and to vote at any meeting of the
stockholders of any corporation in which the Corporation may hold
stock, and, at any such meeting, shall possess and may exercise any
and all of the rights and powers incident to the ownership of such
stock and which, as the owner thereof, the Corporation might have
possessed and exercised.
Section 4-4. Powers and Duties of the Secretary. Unless
------------ ----------------------------------
otherwise determined by the Board of Directors, the Secretary shall
record all proceedings of the meetings of the Corporation, the Board
of Directors and all committees, in books
<PAGE>
to be kept for that purpose, and shall attend to the giving and
serving of all notices for the Corporation. He shall have charge of
the corporate seal, the certificate books, transfer books and stock
ledgers, and such other books and papers as the Board of Directors
may direct. He shall perform all other duties ordinarily incident to
the office of Secretary and shall have such other powers and perform
such other duties as may be assigned to him by the Board of Directors.
Section 4-5. Powers and Duties of the Treasurer. Unless
------------ ----------------------------------
otherwise determined by the Board of Directors, the Treasurer shall
have charge of all the funds and securities of the Corporation which
may come into his hands. When necessary or proper, unless otherwise
ordered by the Board of Directors, he shall endorse for collection on
behalf of the Corporation checks, notes and other obligations, and
shall deposit the same to the credit of the Corporation in such banks
or depositories as the Board of Directors may designate and shall sign
all receipts and vouchers for payments made to the Corporation. He
shall sign all checks made by the Corporation, except when the Board
of Directors shall otherwise direct. He shall enter regularly, in
books of the Corporation to be kept by him for that purpose, a full
and accurate account of all moneys received and paid by him on account
of the Corporation. Whenever required by the Board of Directors, he
shall render a statement of the financial
<PAGE>
condition of the Corporation. He shall at all reasonable times
exhibit his books and accounts to any Director of the Corporation,
upon application at the office of the Corporation during business
hours. He shall have such other powers and shall perform such other
duties as may be assigned to him from time to time by the Board of
Directors. He shall give such bond, if any, for the faithful
performance of his duties as shall be required by the Board of
Directors and any such bond shall remain in the custody of the
President.
Section 4-6. Powers and Duties of the Chairman of the
----------- ----------------------------------------
Board of Directors. Unless otherwise determined by the Board of
------------------
Directors, the Chairman of the Board, if any, shall preside at all
meetings of Directors. The Chairman of the Board shall have such
other powers and perform such further duties as may be assigned to
such officer by the Board of Directors, including, without limitation,
acting as Chief Executive Officer of the Corporation. To be eligible
to serve, the Chairman of the Board must be a Director of the
Corporation.
Section 4-7. Powers and Duties of Vice Presidents and
----------- ----------------------------------------
Assistant Officers. Unless otherwise determined by the Board of
------------------
Directors, each Vice President and each assistant officer shall have
the powers and perform the duties of his respective superior officer.
Vice Presidents and assistant officers shall have such rank as shall
be designated by the Board of Directors and each,
<PAGE>
in the order of rank, shall act for such superior officer in his
absence, or upon his disability or when so directed by such superior
officer or by the Board of Directors. Vice Presidents may be
designated as having responsibility for a specific aspect of the
Corporation's affairs, in which event each such Vice President shall
be superior to the other Vice Presidents in relation to matters within
his aspect. The President shall be the superior officer of the Vice
Presidents. The Treasurer and the Secretary shall be the superior
officers of the Assistant Treasurers and Assistant Secretaries,
respectively.
Section 4-8. Delegation of Office. The Board of Directors
----------- --------------------
may delegate the powers or duties of any officer of the Corporation to
any other officer or to any Director from time to time.
Section 4-9. Vacancies. The Board of Directors shall have
----------- ---------
the power to fill any vacancies in any office occurring from whatever
reason.
Section 4-10. Resignations. Any officer may resign at any
------------ ------------
time by submitting his written resignation to the Corporation. Such
resignation shall take effect at the time of its receipt by the
Corporation, unless another time be fixed in the resignation, in which
case it shall become effective at the time so fixed. The acceptance
of a resignation shall not be required to make it effective.
<PAGE>
ARTICLE V - CAPITAL STOCK
--------------------------
Section 5-1. Stock Certificates. Shares of the
----------- ------------------
Corporation shall be represented by certificates signed by or in the
name of the Corporation by (a) the Chairman or Vice Chairman of the
Board of Directors, or the President or a Vice President, and (b) the
Treasurer or an Assistant Treasurer, or the Secretary or an Assistant
Secretary, representing the number of shares registered in certificate
form. If such certificate is countersigned (i) by a transfer agent
other than the Corporation or its employee, or (ii) by a registrar
other than the Corporation or its employee, the signatures of the
officers of the Corporation may be facsimiles. In case any officer
who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer at the date of issue.
Section 5-2. Determination of Stockholders of Record. The
----------- ---------------------------------------
Board of Directors may fix, in advance, a record date to determine the
stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent to
corporate action in writing without a meeting, or entitled to receive
payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect of any change,
conversion or exchange of
<PAGE>
stock or for the purpose of any other lawful action. Such date shall
be not more than sixty (60) nor less than ten (10) days before the
date of any such meeting, nor more than sixty (60) days prior to any
other action.
If no record date is fixed, the record date for determining
stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next
preceding the day on which notice is given, or, if notice is waived,
at the close of business on the day next preceding the day on which
the meeting is held.
The record date for determining stockholders for any other
purpose shall be at the close of business on the day on which the
Board of Directors adopts the resolution relating thereto.
A determination of stockholders of record entitled to notice
of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting.
Section 5-3. Transfer of Shares. Transfer of shares shall
----------- ------------------
be made on the books of the Corporation only upon surrender of the
share certificate, duly endorsed and otherwise in proper form for
transfer, which certificate shall be cancelled at the time of the
transfer. No transfer of shares shall be made on the
<PAGE>
books of this Corporation if such transfer is in violation of a lawful
restriction noted conspicuously on the certificate.
Section 5-4. Lost, Stolen or Destroyed Share Certificates.
----------- --------------------------------------------
The Corporation may issue a new certificate of stock or uncertified
shares in place of any certificate therefore issued by it, alleged to
have been lost, stolen or destroyed, and the Corporation may require
the owner of the lost, stolen, or destroyed certificate, or his legal
representative to give the Corporation a bond sufficient to indemnify
it against claim that may be made against it on account of the alleged
loss, theft or destruction of any such certificate or the issuance of
such new certificate or uncertificated shares.
ARTICLE VI - NOTICES
---------------------
Section 6-1. Contents of Notice. Whenever any notice of a
----------- ------------------
meeting is required to be given pursuant to these by-laws or the
Certificate of Incorporation or otherwise, the notice shall specify
the place, day and hour of the meeting and, in the case of a special
meeting or where otherwise required by law, the general nature of the
business to be transacted at such meeting.
Section 6-2. Method of Notice. All notices shall be given
----------- ----------------
to each person entitled thereto, either personally or by sending a
copy thereof through the mail or by telegraph, charges prepaid, to his
address as it appears on the records of the Corporation, or supplied
by him to the Corporation for the
<PAGE>
purpose of notice. If notice is sent by mail or telegraph, it shall
be deemed to have been given to the person entitled thereto when
deposited in the United States Mail or with the telegraph office for
transmission. If no address for a stockholder appears on the books of
the Corporation and such stockholder has not supplied the Corporation
with an address for the purpose of notice, notice deposited in the
United States Mail addressed to such stockholder care of General
Delivery in the city in which the principal office of the Corporation
is Located shall be sufficient.
Section 6-3. Waiver of Notice. Whenever notice is required
----------- ----------------
to be given under any provision of law or of the Certificate of
Incorporation or by-laws of the Corporation, a written waiver, signed
by the person entitled to notice, whether before or after the time
stated therein, shall be deemed equivalent to notice. Attendance of a
person at a meeting shall constitute a waiver of notice of such
meeting, except when the person attends a meeting for the express
purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called
or convened. Neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the stockholders,
Directors, or members of a committee of Directors need be specified in
any written waiver of notice unless so required by the Certificate of
Incorporation.
<PAGE>
ARTICLE VII - INDEMNIFICATION OF DIRECTORS AND
OFFICERS AND OTHER PERSONS
------------------------------------------------
Section 7-1. Indemnification.
----------- ---------------
(a) Right to Indemnification. Each person who was or is
------------------------
made a party or is threatened to be made a party to or is otherwise
involved in any action, suit, or proceeding, whether civil, criminal,
administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she is or was
i) a director or officer of the Corporation; or
ii) a director or officer of the Corporation serving
at the request of the Corporation as a director, officer,
employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise,
including service with respect to an employee benefit plan
(hereinafter an "indemnitee"), whether the basis of such a proceeding
is alleged action in an official capacity as a director, officer,
employee or agent or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held
harmless by the Corporation to the fullest extent authorized by the
Delaware General Corporation Law or other Delaware law, against all
expense, liability and loss (including attorney's fees, judgements,
fines, ERISA excise taxes or penalties and amounts paid in settlement)
reasonably incurred or suffered by such indemnitee in connection
therewith; provided,
--------
<PAGE>
however, that the Corporation shall indemnify any such indemnitee in
-------
connection with a proceeding (or part thereof) initiated by such
indemnitee only if such proceeding (or part thereof) was authorized by
the Board of Directors of the Corporation.
(b) Right to Advancement of Expenses. The right to
--------------------------------
indemnification conferred in paragraph (a) of this Article shall
include the right to be paid by the Corporation the expenses actually
and reasonably incurred in defending any proceeding for which such
right to indemnification is applicable in advance of its final
disposition (hereinafter as "advancement of expenses"); provided,
--------
however, that, if the Delaware General Corporation Law requires, an
-------
advancement of expenses incurred by an indemnitee in his or her
capacity as a director or an officer (and not in any other capacity in
which service was or is rendered by such indemnitee, including,
without limitation, service to an employee benefit plan) shall be made
only upon delivery to the Corporation of an undertaking (hereinafter
an "undertaking") , by or on behalf of such indemnitee, to repay all
amounts so advanced if it shall ultimately be determined by final
judicial decision from which there is no further right to appeal
(hereinafter a "final adjudication") that such indemnitee is not
entitled to be indemnified for such expenses under this Section or
otherwise. The financial ability of any indemnitee to make such
repayment shall not be a prerequisite to the making of such payment of
or
<PAGE>
for expenses. Such expenses (including attorneys' fees) shall be so
paid upon such reasonable terms and conditions, if any, as the Board
of Directors deems appropriate.
(c) Non-Exclusivity of Rights. The rights of
-------------------------
indemnification and to the advancement of expenses conferred in this
Article shall not be exclusive of any other right which any person may
have or hereafter acquire under any statute, certificate of
incorporation, by-law, agreement, vote of stockholders or
disinterested directors or otherwise.
(d) Indemnification of Employees and Agents of the
----------------------------------------------
Corporation. The Corporation may, to the extent authorized from time
-----------
to time by the Board of Directors, grant rights to indemnification,
and to the advancement of expenses, to any employee or agent of the
Corporation, or other persons, or to directors, officers, employees or
agents of other corporations which have been merged into or
consolidated with the Corporation, to the fullest extent of the
provisions of this Article with respect to the indemnification and
advancement of expenses of directors and officers of the Corporation.
(e) Insurance. The Corporation may maintain insurance, at
---------
its expense, to protect itself and any director, officer, employee or
agent of the Corporation or another corporation, partnership, joint
venture, trust or other enterprise, or any other person, against any
expense, liability
<PAGE>
or loss, whether or not the Corporation would have the power to
indemnify such person against such expense, liability or loss under
the Delaware General Corporation Law.
(f) Independent Legal Counsel. Independent legal counsel
-------------------------
may be appointed by the Board of Directors, even if a quorum of
disinterested directors is not available, or by a person designated by
the Board of Directors. If independent legal counsel, so appointed
shall determine in a written opinion that indemnification is proper
under this Article, indemnification shall be made without further
action of the Board of Directors.
(g) Amendment or Repeal. Any repeal or modification of
-------------------
this Article shall not adversely affect any right or protection
hereunder of any person in respect of any act or omission occurring
prior to the time of such repeal or modification.
(h) Changes in Delaware Law. References in this Article to
-----------------------
Delaware law or to any provision thereof shall be to such law as it
existed on the date this Article was adopted or as such law thereafter
may be changed; provided that (a) in the case of any change which
limits the indemnification rights or the rights to advancement of
expenses which the Corporation may provide, the rights to
indemnification and to the advancement of expenses provided in this
Article shall continue as theretofore
<PAGE>
to the extent permitted by law; and (b) if such change permits the
Corporation without the requirement of any further action by
shareholders or directors to provide broader indemnification rights or
rights to the advancement of expenses than the Corporation was
permitted to provide prior to such change, then the rights to
indemnification and the advancement of expenses shall be so broadened
to the extent permitted by law.
(i) Applicability. The provisions of this Article shall be
-------------
applicable to all actions, suits or proceedings commenced after its
adoption, whether such arise out of acts or
omissions which occurred prior or subsequent to such adoption and
shall continue as to a person who has ceased to be a director,
officer, employee or agent of, or to render services for or at the
request of the Corporation or, as the case may be, its parent or a
subsidiary, and shall inure to the benefit of the heirs and personal
representatives of such person.
ARTICLE VIII - SEAL
--------------------
The form of the seal of the
Corporation, called the corporate seal of [Form of Seal]
the Corporation, shall be as impressed
adjacent hereto.
<PAGE>
ARTICLE IX - FISCAL YEAR
-------------------------
The Board of Directors shall have the power by resolution to
fix the fiscal year of the Corporation. If the Board of Directors
shall fail to do so, the President shall fix the fiscal year.
ARTICLE X - AMENDMENTS
-----------------------
The original or other by-laws may be adopted, amended or
repealed by the stockholders entitled to vote thereon at any regular
or special meeting or, if the Certificate of Incorporation so
provides, by the Board of Directors. The fact that such power has
been so conferred upon the Board of Directors shall not divest the
stockholders of the power nor limit their power to adopt, amend or
repeal by-laws.
ARTICLE XI - INTERPRETATION OF BY-LAWS
---------------------------------------
All words, terms and provisions of these by-laws shall be
interpreted and defined by and in accordance with the General
Corporation Law of the State of Delaware, as amended, and as amended
from time to time hereafter.
NYFS06...:\47\41847\0008\1710\ARTD136S.330
Exhibit 3.2(p)(i)
<PAGE>
FINANCIAL EXCHANGE COMPANY OF MICHIGAN, INC.
* * * * *
B Y - L A W S
* * * * *
ARTICLE I
OFFICES
Section 1. The registered office shall be in Detroit,
Michigan.
Section 2. The corporation may also have offices at such
other places both within and without the State of Michigan as the
board of directors may from time to time determine or the business of
the corporation may require.
ARTICLE II
ANNUAL MEETINGS OF SHAREHOLDERS
Section 1. All meetings of shareholders for the election of
directors shall be held in the City of New York, State of New York, at
such place as may be fixed from time to time by the board of
directors.
Section 2. Annual meetings of shareholders, commencing with
the year 1985, shall be held on the 13th day of June if not a legal
holiday, and if a legal holiday, then on the next secular
<PAGE>
day following, at _______M., at which they shall elect by a plurality
vote a board of directors, and transact such other business as may
properly be brought before the meeting.
Section 3. Written notice of the time, place and purposes
of a meeting of shareholders shall be given not less than ten nor more
than sixty days before the date of the meeting, either personally or
by mail, to each shareholder of record entitled to vote at the
meeting.
ARTICLE III
SPECIAL MEETINGS OF SHAREHOLDERS
Section 1. Special meetings of shareholders for any purpose
other than the election of directors may be held at such time and
place within or without the State of Michigan as shall be stated in
the notice of the meeting or in a duly executed waiver of notice
thereof.
Section 2. Special meetings of shareholders may be called
at any time, for any purpose or purposes, by the board of directors or
by such other persons as may be authorized by law.
Section 3. Written notice of the time, place and purposes
of a special meeting of shareholders shall be given not less than ten
nor more than sixty days before the date of the meeting, either
personally or by mail, to each shareholder of record entitled to vote
at the meeting.
<PAGE>
Section 4. The business transacted at any special meeting
of shareholders shall be limited to the purposes stated in the notice.
ARTICLE IV
QUORUM AND VOTING OF STOCK
Section 1. The holders of a majority of the shares of stock
issued and outstanding and entitled to vote, represented in person or
by proxy, shall constitute a quorum at all meetings of the
shareholders for the transaction of business except as otherwise
provided by statute or by the articles of incorporation. The
shareholders present in person or by proxy at such meeting may
continue to do business until adjournment, notwithstanding the
withdrawal of enough shareholders to leave less than a quorum.
Whether or not a quorum is present, the meeting may be adjourned by a
vote of the shares present. When the holders of a class or series of
shares, are entitled to vote separately on an item of business, this
section applies in determining the presence of a quorum of such class
or series for transaction of the item of business.
Section 2. If a quorum is present, the affirmative vote of
a majority of the shares of stock represented at the meeting shall be
the act of the shareholders unless the vote of a greater number of
shares of stock is required by law or the articles of incorporation.
<PAGE>
Section 3. Each outstanding share of stock, having voting
power, shall be entitled to one vote on each matter submitted to a
vote at a meeting of shareholders. A shareholder may vote either in
person or by proxy executed in writing by the shareholder or by his
duly authorized attorney-in-fact.
Section 4. Any action required or permitted to be taken at
an annual or special meeting of shareholders may be taken without a
meeting, without prior notice and without a vote, if all the
shareholders entitled to vote thereon consent thereto in writing.
ARTICLE V
DIRECTORS
Section 1. The number of directors shall be three.
Directors need not be residents of the State of Michigan nor
shareholders of the corporation. The first board of directors shall
hold office until the first annual meeting of shareholders. The
directors, other than the first board of directors, shall be elected
at the annual meeting of the shareholders, and shall hold office for
the term for which he is elected and until his successor is elected
and qualified.
Section 2. Any vacancy occurring in the board of directors
may be filled by the affirmative vote of a majority of the remaining
directors though less than a quorum of the board of
<PAGE>
directors. A directorship to be filled because of an increase in the
number of directors or to fill a vacancy may be filled by the board
for a term of office continuing only until the next election of
directors by the shareholders.
Section 3. The business affairs of the corporation shall be
managed by its board except as otherwise provided by statute or in the
articles of incorporation or by these by-laws directed or required to
be exercised or done by the shareholders.
Section 4. The directors may keep the books of the
corporation, outside of the State of Michigan, at such place or places
as they may from time to time determine.
Section 5. The board of directors, by the affirmative vote
of a majority of the directors in office, and irrespective of any
personal interest of any of them, may establish reasonable
compensation of directors for services to the corporation as directors
or officers.
ARTICLE VI
MEETINGS OF THE BOARD OF DIRECTORS
Section 1. Regular or special meetings of the board of
directors may be held either within or without the State of Michigan.
Section 2. The first meeting of each newly elected board of
directors shall be held at such time and place as shall
<PAGE>
be fixed by the vote of the shareholders at the annual meeting and no
notice of such meeting shall be necessary to the newly elected
directors in order legally to constitute the meeting, provided a
quorum shall be present, or it may convene at such place and time as
shall be fixed by the consent in writing of all the directors.
Section 3. Regular meetings of the board of directors may
be held upon such notice, or without notice, and at such time and at
such place as shall from time to time be determined by the board.
Section 4. Special meetings of the board of directors may
be called by the president on one day's notice to each director,
either personally or by mail or by telegram; special meetings shall be
called by the president or secretary in like manner and on like notice
on the written request of two directors.
Section 5. Attendance of a director at a meeting
constitutes a waiver of notice of the meeting, except where a director
attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called
or convened. Neither the business to be transacted at, nor the
purpose of, a regular or special meeting need be specified in the
notice or waiver of notice of the meeting.
<PAGE>
Section 6. A majority of the members of the board then in
office constitutes a quorum for transaction of business, unless the
articles of incorporation provide for a larger or smaller number. The
vote of the majority of members present at a meeting at which a quorum
is present constitutes the action of the board unless the vote of a
larger number is required by statute, the articles or these by-laws.
If a quorum shall not be present at any meeting of directors, the
directors present there-at may adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum
shall be present.
Section 7. Unless otherwise provided by the articles of
incorporation action required or permitted to be taken pursuant to
authorization voted at a meeting of the board, may be taken without a
meeting if, before or after the action, all members of the board
consent thereto in writing. The written consents shall be filed with
the minutes of the proceedings of the board. The consent has the same
effect as a vote of the board for all purposes.
ARTICLE VII
COMMITTEES
Section 1. Unless otherwise provided in the articles of
incorporation, the board may designate one or more committees,
<PAGE>
each committee to consist of one or more of the directors of the
corporation. The board may designate one or more directors as
alternate mergers of a committee, who may replace an absent or
disqualified member at a meeting of the committee. In the absence or
disqualification of a member of a committee, the members thereof
present at a meeting and not disqualified from voting, whether or not
they constitute a quorum, may unanimously appoint another member of
the board to act at the meeting in place of such an absent or
disqualified member. A committee, and each member thereof, shall
serve at the pleasure of the board. A committee, to the extent
provided in the resolution of the board or in the by-laws, may
exercise all powers and authority of the board in management of the
business and affairs of the corporation subject to any limitations by
statute or in the articles of incorporation.
ARTICLE VIII
NOTICES
Section 1. When a notice or communication is required or
permitted by this act to be given by mail, it shall be mailed, except
as otherwise provided in this act, to the person to whom it is
directed at the address designated by him for that purpose or, if none
is designated, at his last known address. The notice or communication
is given when deposited, with postage thereon
<PAGE>
prepaid, in a post office or official depository under the exclusive
care and custody of the United States postal service. The mailing
shall be registered, certified or other first class mail except where
otherwise provided by statute.
Section 2. When, under statutory requirements or the
articles of incorporation or these by-laws or by the terms of an
agreement or instrument, a corporation or the board or any committee
thereof may take action after notice to any person or after lapse of a
prescribed period of time, the action may be taken without notice and
without lapse of the period of time, if at any time before or after
the action is completed the person entitled to notice or to
participate in the action to be taken or, in case of a shareholder, by
his attorney-in-fact, submits a signed waiver of such requirements.
ARTICLE IX
OFFICERS
Section 1. The officers of the corporation shall be
appointed by the board of directors and shall be a chairman of the
board, a president, one or more vice-presidents, secretary, treasurer
and such other officers as may be determined by the board.
Section 2. The board of directors at its first meeting
after each annual meeting of shareholders shall choose a
<PAGE>
president, one or more vice-presidents, secretary, and treasurer, none
of whom need be a member of the board.
Section 3. The board of directors may appoint such other
officers, assistant officers, employees and agents as it deems
necessary and prescribe their powers and duties.
Section 4. The salaries of all officers and agents of the
corporation shall be fixed by the board of directors.
Section 5. An officer elected or appointed shall hold
office for the term for which he is elected or appointed and until his
successor is elected or appointed and qualified, or until his
resignation or removal. An officer elected or appointed by the board
may be removed by the board with or without cause.
THE PRESIDENT
Section 6. The president shall be the chief executive
officer of the corporation, shall preside at all meetings of the
shareholders and the board of directors, shall have general and active
management of the business of the corporation and shall see that all
orders and resolutions of the board of directors are carried into
effect.
Section 7. Be shall execute bonds, mortgages and other
contracts requiring a seal, under the seal of the corporation, except
where required or permitted by law to be otherwise signed
<PAGE>
and executed and except where the signing and execution thereof shall
be expressly delegated by the board of directors to some other officer
or agent of the corporation.
THE VICE-PRESIDENTS
Section 8. The vice-president, or if there shall be more
than one, the vice-presidents in the order determined by the board of
directors, shall, in the absence or disability of the president,
perform the duties and exercise the powers of the president and shall
perform such other duties and have such other powers as the board of
directors may from time to time prescribe.
THE SECRETARY AND ASSISTANT SECRETARIES
Section 9. The secretary shall attend all meetings of the
board of directors and all meetings of the shareholders and record all
the proceedings of the meetings of the corporation and of the board of
directors in a book to be kept for that purpose and shall perform like
duties for the standing committees when required. He shall give, or
cause to be given, notice of all meetings of the shareholders and
special meetings of the board of directors, and shall perform such
other duties as may be prescribed by the board of directors or
president, under whose supervision he shall be. He shall have custody
of the corporate seal of the corporation and he, or an assistant
secretary, shall
<PAGE>
have authority to affix the same to any instrument requiring it and
when so affixed, it may be attested by his signature or by the
signature of such assistant secretary. The board of directors may
give general authority to any other officer to affix the seal of the
corporation and to attest the affixing by his signature.
Section 10. The assistant secretary, or if there be more
than one, the assistant secretaries in the order determined by the
board of directors, shall, in the absence or disability of the
secretary, perform the duties and exercise the powers of the secretary
and shall perform such other duties and have such other powers as the
board of directors may from time to time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 11. The treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the
corporation and shall deposit all moneys and other valuable effects in
the name and to the credit of the corporation in such depositories as
may be designated by the board of directors.
Section 12. He shall disburse the funds of the corporation
as may be ordered by the board of directors, taking proper vouchers
for such disbursements, and shall render to the
<PAGE>
president and the board of directors, at its regular meetings, or when
the board of directors so requires, an account of all his transactions
as treasurer and of the financial condition of the corporation.
Section 13. If required by the board of directors, he shall
give the corporation a bond in such sum and with such surety or
sureties as shall be satisfactory to the board of directors for the
faithful performance of the duties of his office and for the
restoration to the corporation, in case of his death, resignation,
retirement or removal from office, of all books, papers, vouchers,
money and other property of whatever kind in his possession or under
his control belonging to the corporation.
Section 14. The assistant treasurer, or, if there shall be
more than one, the assistant treasurers in the order determined by the
board of directors, shall, in the absence or disability of the
treasurer, perform the duties and exercise the powers of the treasurer
and shall perform such other duties and have such other powers as the
board of directors may from time to time prescribe.
<PAGE>
ARTICLE X
CERTIFICATES FOR SHARES
Section 1. The shares of the corporation shall be
represented by certificates signed by the chairman of the board, vice-
chairman of the board, president or a vice-president and by the
treasurer, assistant treasurer, secretary or assistant secretary of
the corporation, and may be sealed with the seal of the corporation or
a facsimile thereof. A certificate representing shares shall state
upon its face that the corporation is formed under the laws of this
state, the name of the person to whom issued, the number and class of
shares, and the designation of the series, if any, which the
certificate represents, the par value of each share represented by the
certificate, or a statement that the shares are without par value and
shall set forth on its face or back or state that the corporation will
furnish to a shareholder upon request and without charge a full
statement of the designation, relative rights, preferences and
limitations of the shares of each class authorized to be issued, and
if the corporation is authorized to issue any class of shares in
series, the designation, relative rights, preferences and limitations
of each series so far as the same have been prescrIbed and the
authority of the board to designate and prescribe the relative rights,
preferences and limitations of other series.
<PAGE>
Section 2. The signatures of the officers may be facsimiles
if the certificate is countersigned by a transfer agent or registered
by a registrar other than the corporation itself or its employee. In
case any officer who has signed or whose facsimile signature has been
placed upon a certificate ceases to be such officer before the
certificate is issued, it may be issued by the corporation with the
same effect as if he were such officer at the date of its issue.
LOST CERTIFICATES
Section 3. The board of directors may direct a new
certificate to be issued in place of any certificate theretofore
issued by the corporation alleged to have been lost or destroyed, and
the board may require the owner of the lost or destroyed certificate,
or his legal representative, to give the corporation a bond sufficient
to indemnify the corporation against any claim that may be made
against it on account of the alleged lost or destroyed certificate or
the issuance of such a new certificate.
TRANSFERS OF SHARES
Section 4. Upon surrender to the corporation or the
transfer agent of the corporation of a certificate representing shares
duly endorsed or accompanied by proper evidence of succession,
assignment or authority to transfer, a new certificate shall be issued
to the person entitled thereto, and
<PAGE>
the old certificate cancelled and the transaction recorded upon the
books of the corporation.
FIXING OF RECORD DATE
Section 5. For the purpose of determining shareholders
entitled to notice of or to vote at a meeting of shareholders or an
adjournment thereof, or to express consent or to dissent from a
proposal without a meeting, or for the purpose of determining
shareholders entitled to receive payment of a dividend or allotment of
a right, or for the purpose of any other action, the board of
directors may fix, in advance, a date as the record date for any such
determination of shareholders. The date shall not be more than sixty
nor less than ten days before the date of the meeting, not more than
sixty days before any other action. If a record date is not fixed,
the record date for determination of shareholders entitled to notice
of or to vote at a meeting of shareholders shall be the close of
business on the day next preceding the day on which notice is given,
or, if no notice is given, the day next preceding the day on which the
meeting is held, and the record date for determining shareholders for
any purpose shall be the close of business on the day on which the
resolution of the board relating thereto is adopted. When a
determination of shareholders of record entitled to notice of or to
vote at a meeting of shareholders has been made, the
<PAGE>
determination applies to any adjournment of the meeting, unless the
board fixes a new record date for the adjourned meeting.
REGISTERED SHAREHOLDERS
Section 6. For the purpose of determining shareholders
entitled to vote or receive payment of a dividend or allotment of a
right, the corporation shall be authorized to accept the list of
shareholders made and certified by the officer or agent having
charge of the stock transfer books as prima facie evidence as to who
are such shareholders on the designated record date.
LIST OF SHAREHOLDERS
Section 7. The officer or agent having charge of the
stock transfer books for shares of a corporation shall make and
certify a complete list of the shareholders entitled to vote at a
shareholders' meeting or any adjournment thereof. The list shall be
arranged alphabetically within each class and series, with the address
of, and the number of shares held by each shareholder, produced at the
time and place of the meeting, subject to inspection by any
shareholder during the whole time of the meeting and be prima facie
evidence as to who are the shareholders entitled to examine the list
or to vote at the meeting. A person who is a shareholder of record of
a
<PAGE>
corporation, upon at least ten days' written demand may examine for
any proper purpose in person or by agent or attorney, during usual
business hours, its minutes of shareholders' meetings and record of
shareholders and make extracts therefrom, at the places where they are
kept.
ARTICLE XI
DIVIDENDS
Section 1. The board of directors may declare and pay
dividends or make other distributions in cash, bonds or property of
the corporation, including the shares or bonds of other corporations,
on its outstanding shares, except when currently the corporation is
insolvent or would thereby be made insolvent, or when the declaration,
payment or distribution would be contrary to any statutory restriction
or restriction contained in the articles of incorporation.
Section 2. Before payment of any dividend, the board of
directors may create reserves from its earned surplus or capital
surplus for any proper purpose and may increase, decrease or abolish
such reserve.
<PAGE>
CHECKS
Section 3. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other
person or persons as the board of directors may from time to time
designate.
FISCAL YEAR
Section 4. The fiscal year of the corporation shall be
fixed by resolution of the board of directors.
SEAL
Section 5. The corporate seal shall have inscribed thereon
the name of the corporation, the year of its organization and the
words "Corporate Seal, Michigan". The seal may be used by causing it
or a facsimile thereof to be impressed or affixed or in any manner
reproduced.
ARTICLE XII
AMENDMENTS
These by-laws may be amended or repealed or new by-laws may
be adopted by the shareholders or board of directors except as may be
provided in the articles of incorporation. The shareholders may
prescribe in these by-laws that any by-law made by them shall not be
altered or repealed by the board of
<PAGE>
directors. Amendment of the by-laws by the board requires a vote of
not less than a majority of the members of the board then in office.
ARTICLE XIII
DIRECTORS' ANNUAL STATEMENT
Section 1. At least once in each year the board of
directors shall cause a financial report of the corporation for the
preceding fiscal year to be made and distributed to each shareholder
thereof within four months after the end of the fiscal year. The
report shall include the corporation's statement of income, its year-
end balance sheet and, if prepared by the corporation, its statement
of source and application of funds and such other information as may
be required by statute.
FINANCIAL STATEMENT TO SHAREHOLDERS
Section 2. Upon written request of a shareholder, the
corporation shall mail to the shareholder its balance sheet as at the
end of the preceding fiscal year; its statement of income for such
fiscal year; and, if prepared by the corporation, its statement of
source and application of funds for such fiscal year.
NYFS06...:\47\41847\0008\1710\BYLD146B.280
Exhibit 3.2(q)(i)
<PAGE>
CODE OF REGULATIONS
OF
FINANCIAL EXCHANGE COMPANY OF OHIO, INC.
(an Ohio corporation)
ARTICLE I
OFFICES
SECTION 1. OFFICES. The Corporation shall maintain its
registered office in the State of Ohio, 21 East State Street, City of
Columbus, and its resident agent at such address is the United States
Corporation Company. The Corporation may also have offices in such
other places in the United States or elsewhere as the Board of
Directors may, from time, appoint or as the business of the
Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. ANNUAL MEETINGS. Annual Meetings of
stockholders for the election of directors and for such other business
as properly may be conducted at such meetings shall be held at such
place, either within or without the State of Ohio, and at such time
and date as the Board of Directors shall determine by resolution and
set forth in the notice of the meeting. In the event that the Board
of Directors fails to so
<PAGE>
determine the time, date and place for the annual meeting, it shall be
held, beginning in 1979, at the principal office of the Corporation at
10 o'clock A.M. on the first Monday of the fourth month following the
close of the fiscal year of the Corporation.
SECTION 2. SPECIAL MEETINGS. Special meetings of the
stockholders for any purpose may be called by the Chairman of the
Board, the President or by resolution of the Board of Directors and
shall be called by the President upon the written request of not less
than 25% in interest of the stockholders entitled to vote thereat.
Notice of each special meeting shall be given according to Section 3
of this Article II.
SECTION 3. NOTICE OF MEETINGS. Written notice of any
meeting of the stockholders of the Corporation, in which the purpose,
place, date and time of the meeting are set forth, shall be mailed to
or delivered to each stockholder of record entitled to vote thereat.
Such notice shall be given not less than seven (7) days nor more than
sixty (60) days before the date of any such meeting. Except where
prohibited by law, the Corporation's Articles of Incorporation or
these Regulations, business not set forth in the notice of meeting may
also be transacted at such meeting, provided only that such business
properly comes before the meeting.
SECTION 4. QUORUM. Except as otherwise required by law or
the Corporation's Articles of Incorporation, the presence,
<PAGE>
in person or by proxy, at any meeting of the stockholders of the
Corporation, of stockholders holding a majority of the outstanding
stock of the Corporation entitled to vote thereat shall constitute a
quorum thereof.
SECTION 5. VOTING. Each holder of the Common Stock of the
Corporation shall be entitled to one (1) vote, in person or by proxy,
for each share of stock held by him, on all matters to come before the
stockholders provided, however, that only those shares which are fully
paid and non-assessable shall be entitled to vote. Upon the demand of
any stockholder entitled to vote at any meeting, the vote upon any
question before such meeting shall be by written ballot. All
elections of directors shall be decided by plurality vote. Unless
otherwise provided by law, if notice in writing is given by any
stockholder to the President, a Vice-President, or the Secretary of
the Corporation, not less than forty-eight (48) hours before the time
fixed for holding a meeting of the stockholders for the purpose of
electing directors if notice of such meeting has been given at least
ten (10) days prior thereto, and otherwise not less than twenty-four
(24) hours before such time, that he desires that the voting at such
election shall be cumulative, and if an announcement of the giving of
such notice is made upon the convening of the meeting by the Chairman
or Secretary or by or on behalf of the stockholder giving such notice,
each stockholder has the right to
<PAGE>
cumulate such voting power as he possesses and to give one candidate
as many votes as the number of directors to be elected multiplied by
the number of his votes equals, or to distribute his vote on the same
principle among two or more candidates, as he sees fit. All other
questions shall be decided by majority vote, unless otherwise required
by these Regulations, the Corporation's Articles of Incorporation or
law.
SECTION 6. INSPECTORS. The Directors, in advance of any
meeting of stockholders, may appoint inspectors of election to act at
such meeting or any adjournment thereof, and if inspectors are not so
appointed, the Chairman presiding at any meeting of stockholders may,
and on the request of any stockholder or his proxy shall, in his
discretion, appoint one or more persons to act as inspectors or
tellers, to receive, canvass and report the votes cast by the
stockholders at such meeting, but no candidate for the office of
director shall be appointed as inspector or teller at any meeting for
the election of directors.
SECTION 7. CHAIRMAN OF MEETINGS. The Chairman of the Board
of Directors of the Corporation, if one be elected, or, in his absence
or disability or the vacancy of such office, the President of the
Corporation shall preside at all meetings of the stockholders.
SECTION 8. SECRETARY OF MEETING. The Secretary of the
Corporation shall act as Secretary of all meetings of the
<PAGE>
stockholders, and, in his absence, the Chairman of the Board of
Directors, if one be elected, or the President shall appoint a person
to act as Secretary of such meetings.
SECTION 9. LISTS OF STOCKHOLDERS. A complete list of the
stockholders entitled to vote at any meeting of the stockholders,
arranged in alphabetical order, with the address of each and the
number and class of shares held by each, shall be produced at such
meeting upon request of any stockholder for any purpose germane to the
meeting.
SECTION 10. ACTION WITHOUT MEETING. Whenever stockholders
are required or permitted to take any action by vote, such action may
be taken without a meeting or written consent, setting forth the
action so taken, signed by the holders of all outstanding shares
entitled to vote thereon.
SECTION 11. ADJOURNMENT. At any meeting of stockholders of
the Corporation, if less than a quorum be present, a majority of the
stockholders entitled to vote at the meeting, present in person or by
proxy, shall have the power to adjourn the meeting to another time,
place and date without notice other than by announcement at the
meeting so adjourned. Any business may be transacted at the meeting
originally noticed, but only those stockholders entitled to vote at
the meeting originally noticed shall be entitled to vote at any
adjourned meeting. If the adjournment is for more than thirty (30)
days
<PAGE>
from the date of the meeting originally noticed, or if a new record
date, as provided for in Section 5 of Article V of these Regulations,
is fixed for the adjourned meeting, a notice of the adjourned meeting
shall be given to each stockholder of record entitled to vote at the
adjourned meeting.
ARTICLE III
BOARD OF DIRECTORS
SECTION 1. POWERS. The property, business and affairs of
the Corporation shall be managed and controlled by its Board of
Directors. The Board shall exercise all of the powers of the
Corporation except such as are by law, the Corporation's Articles of
Incorporation or these Regulations conferred upon or reserved to the
stockholders.
SECTION 2. NUMBER AND TERM. The number of directors shall
not be less than three (3) or, if not so fixed, shall be three (3),
provided that where all shares of the Corporation are owned of record
by one or two stockholders, the number of directors may be less than
three (3) but less than the number of stockholders. Initially, the
number of directors shall be three. The Board of Directors shall be
elected by the stockholders at their annual meeting, and each director
shall be elected to serve for the term of one (1) year and until his
successor shall be elected and qualified or until his earlier death,
resignation or
<PAGE>
removal. This election need not be by written ballot. Directors need
not be stockholders.
SECTION 3. RESIGNATIONS. Any director or member of a
committee of the Board may resign at any time. Such resignation shall
be made in writing, and shall take effect at the time specified
therein, and if no time be specified, at the time of its receipt by
the President or Secretary. The acceptance of a resignation shall not
be necessary to make it effective.
SECTION 4. REMOVAL. Any director or the entire Board of
Directors may be removed either for or without cause at any time by
the affirmative vote of the holders of a majority of all the shares of
stock outstanding and entitled to vote for the election of directors
at any annual or special meeting of the stockholders called for that
purpose, provided that unless all the directors, or all the directors
of a particular class, if any, are removed, no individual director
shall be removed in case the votes of a sufficient number of shares
are cast against his removal which, if cumulatively voted at an
election of all the directors, or all the directors of a particular
class as the case may be, would be sufficient to elect at least one
(1) director. Vacancies thus created may be filled at the meeting
held for the purpose of removal by the affirmative vote of a majority
of the stockholders entitled to vote for directors, or if not so
filled, by the directors as provided in Section 5 of this Article III.
<PAGE>
SECTION 5. VACANCIES AND NEWLY CREATED DIRECTORSHIPS.
Vacancies in the office of any director or member of a committee of
the Board of Directors and newly created directorships may be filled
by a majority vote of the remaining directors in office. Any director
so chosen shall hold office for the unexpired term of his predecessor
and until his successor shall be elected and qualified by electing the
director so removed.
SECTION 6. MEETINGS. The newly elected directors shall
hold their first meeting to organize the Corporation, elect officers
and transact any other proper business. An annual organizational
meeting of the Board of Directors shall be held immediately after each
annual meeting of the stockholders, or at such time and place as may
be noticed for meeting.
Regular meetings of the directors may be held at the office
of the Corporation or at such places and times as shall be determined
from time to time by resolution of the directors.
Special meetings of the Board shall be called by the
Chairman of the Board or the President or upon the written request of
any two (2) directors with at least two days' notice to each director
and shall be held at such place or places as may be determined by the
directors or as shall be stated in the notice of the meeting.
Members of the Board, or any committee designated by the
Board, if any, may participate in a meeting of the Board, or
<PAGE>
any committee, by means of conference telephone or similar
communications equipment by means of which all persons participating
in the meeting can hear each other, and such participation in a
meeting shall constitute presence in person at the meeting.
SECTION 7. QUORUM, VOTING AND ADJOURNMENT. A majority of
the entire number of directors or of any committee of the Board shall
constitute a quorum for the transaction of business at any meeting of
the Board or committee, as the case may be. At any meeting of the
Board or any committee of the Board, if less than a quorum be present,
a majority of the Directors or committee members present may adjourn
the meeting from time to time until a quorum is present. No notice of
such adjourned meeting need be given other than by announcement at the
meeting so adjourned. The vote of a majority of the directors present
at a meeting at which a quorum is present shall be the act of the
Board.
SECTION 8. COMMITTEES. The Board of Directors may, by
resolution or resolutions passed by a majority of the Board, designate
one or more committees, including but not limited to an Executive
Committee and an Audit Committee, each such committee to consist of
not less than three (3) directors of the Corporation. The Board may
designate one or more directors as alternate members of any committee,
to replace any absent or
<PAGE>
disqualified member at any meeting of the committee. Any such
committee, to the extent specified by resolution of the Board, may
have and exercise the powers of the Board of Directors in the
management of the business and affairs of the Corporation and may
authorize the seal of the Corporation to be affixed to all papers
which may require it; but no such committee shall have the power or
authority in reference to amending the Articles of Incorporation of
the Corporation, adopting an agreement of merger or consolidation,
recommending to the stockholders the sale, lease, or exchange of all
or substantially all of the Corporation's property and assets,
recommending to the stockholders a dissolution of the Corporation or a
revocation of a dissolution, filling vacancies among the directors or
in any committee of directors, or amending these Regulations and,
unless the enabling resolution of the Board expressly so provides, no
such committee shall have the power or authority to declare a dividend
or to authorize the issuance of stock of the Corporation. All
committees of the Board shall report their proceedings to the Board
when required.
SECTION 9. ACTION WITHOUT A MEETING. Any action required
or permitted to be taken at any meeting of the Board of Directors or
of any committee of the Board may be taken without notice and without
a meeting if all members of the Board or committee, as the case may
be, consent to the action in writing.
<PAGE>
SECTION 10. COMPENSATION. Directors shall be entitled to
receive and be paid for their services such compensation as the Board
of Directors may determine. Any director may serve the Corporation in
any other capacity as an officer, agent or otherwise, and receive
compensation therefor.
SECTION 11. CORPORATE BOOKS. The Directors may keep the
books of the Corporation, except such as are required by law to be
kept within the state, outside the State of Ohio, at such place or
places as they may from time to time determine.
SECTION 12. BYLAWS. Except where prohibited by law, the
Board of Directors, for their own government, may adopt By-laws not
inconsistent with the Articles of Incorporation or these Regulations.
ARTICLE IV
OFFICERS
SECTION 1. The officers of the Corporation shall be a
President, a Treasurer and a Secretary, all of whom shall be elected
by the Board of Directors and who shall hold office for a term of one
year and until their successors are elected and qualified or until
their earlier resignation or removal. In addition, the Board of
Directors may elect a Chairman of the Board, one or more Vice
Presidents, including an Executive Vice President, one or more
Assistant Treasurers and one or more
<PAGE>
Assistant Secretaries, who shall hold their office for such terms and
shall exercise such powers and perform such duties as shall be
determined from time to time by the Board of Directors. The initial
officers shall be elected at the first meeting of the Board of
Directors and, thereafter, at the annual organizational meeting of the
Board held after each annual meeting of the stockholders. Any number
of offices may be held by the same person, except that the office of
President and Secretary must be held by different persons.
SECTION 2. OTHER OFFICERS AND AGENTS. The Board of
Directors may appoint such other officers and agents as it deems
advisable, who shall hold their office for such terms and shall
exercise such powers and perform such duties as shall be determined
from time to time by the Board of Directors.
SECTION 3. CHAIRMAN. The Chairman of the Board of
Directors, if one be elected, must be a director of the Corporation,
shall preside at all meetings of the Board of Directors and of the
stockholders and shall have such powers and perform such other duties
as from time to time may be assigned to him by the Board of Directors.
SECTION 4. PRESIDENT. The President shall be the Chief
Executive Officer of the Corporation. He shall exercise such duties
as customarily pertain to the office of President and Chief Executive
Officer, and shall have general and active
<PAGE>
management of the property, business and affairs of the Corporation,
subject to the supervision and control of the directors and, if there
be any, the Executive Committee of the Board. He shall perform such
other duties as prescribed from time to time by the Board, the
Executive Committee of the Board, if any, or these Regulations.
In the absence, disability or refusal of the Chairman of the
Board to act, or the vacancy of such office, the President shall
preside at all meetings of the stockholders and, if he is a director,
of the Board of Directors. Except as the Board of Directors shall
authorize the execution thereof in some other manner, the President
shall execute mortgages and other contracts on behalf of the
Corporation, and shall cause the seal to be affixed to any instrument
requiring it and, when so affixed, the seal shall be attested by the
signature of the Secretary or the Treasurer or an Assistant Secretary
or an Assistant Treasurer.
SECTION 5. VICE PRESIDENTS. Each Vice President (of whom
one or more may be designated an Executive Vice President) shall have
such powers and shall perform such duties as shall be assigned to him
by the President or the Board of Directors.
SECTION 6. TREASURER. The Treasurer shall have the custody
of the corporate funds, securities, evidences of indebtedness and
other valuables of the Corporation and shall keep full and accurate
account of receipts and disbursements in
<PAGE>
books belonging to the Corporation. He shall deposit all moneys and
other valuables in the name and to the credit of the Corporation in
such depositories as may be designated by the Board of Directors.
The Treasurer shall disburse the funds of the Corporation as
may be ordered by the Board of Directors, or the President. He shall
render to the President and Board of Directors, upon their request, a
report of the financial condition of the Corporation. If required by
the Board of Directors, he shall give the Corporation a bond for the
faithful discharge of his duties in such amount and with such surety
as the Board shall prescribe.
SECTION 7. SECRETARY. The Secretary will be the chief
administrative officer of the Corporation; cause minutes of all
meetings of the shareholders and directors to be recorded and kept;
cause all notices required by these Regulations or otherwise to be
given properly; see that the minute books, stock books, and other
non-financial books, records and papers of the Corporation are kept
properly; and cause all reports, statements, returns, certificates and
other documents to be prepared and filed when and as required.
SECTION 8. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES.
Each Assistant Treasurer and each Assistant Secretary, if any be
elected, shall be vested with all the powers
<PAGE>
and shall perform all the duties of the Treasurer and Secretary,
respectively, in the absence or disability of such officer, unless or
until the Board of Directors shall otherwise determine. In addition,
Assistant Treasurers and Assistant Secretaries shall have such powers
and shall perform such duties as shall be assigned to them by the
Board.
SECTION 9. CORPORATE FUNDS AND CHECKS. The funds of the
Corporation shall be kept in such depositories as shall from time to
time be prescribed by the Board of Directors or the Executive
Committee of the Board, if any. All checks or other orders for the
payment of money shall be signed by the President or the Treasurer or
such other person or agent as may from time to time be authorized by
the Board of Directors or the Executive Committee of the Board, if
any, with such countersignature, if any, as may be required by the
Board of Directors or the Executive Committee of the Board, if any.
SECTION 10. CONTRACTS AND OTHER DOCUMENTS. The President
or Treasurer, or such other officer or officers as may from time to
time be authorized by the Board of Directors or the Executive
Committee of the Board, if any, shall have power to sign and execute
on behalf of the Corporation deeds, conveyances and contracts, and any
and all other documents requiring execution by the Corporation.
<PAGE>
SECTION 11. OWNERSHIP OF STOCK OF ANOTHER CORPORATION. The
President or the Treasurer, or such other officer or person as shall
be authorized by the Board of Directors or the Executive Committee of
the Board, if any, shall have power and authority on behalf of the
Corporation to attend and to vote at any meeting of the stockholders
of any corporation in which this Corporation may hold stock; may
exercise on behalf of this Corporation any and all of the rights and
powers incident to the ownership of such stock at any such meeting;
and shall have power and authority to execute and deliver proxies and
consents on behalf of this Corporation in connection with the exercise
by this Corporation of the rights and powers incident to the ownership
of such stock.
SECTION 12. DELEGATION OF DUTIES. The Board of Directors
may delegate to another officer or director, the powers or duties of
any officer, in case of such officer's absence, disability or refusal
to exercise such powers or perform such duties.
SECTION 13. RESIGNATION AND REMOVAL. Any officer of the
Corporation may be removed from office for or without cause at any
time by the Board of Directors. Any officer may resign at any time in
the same manner prescribed for the resignation of directors of the
Corporation and as set forth in Section 3 of Article III of these
Regulations.
<PAGE>
SECTION 14. VACANCIES. In case any office shall become
vacant, the Board of Directors shall have power to fill such vacancy.
ARTICLE V
STOCK
SECTION 1. CERTIFICATES OF STOCK. Each certificate for
stock of the Corporation shall state that the corporation is organized
under the laws of the State of Ohio; shall state the name of the
person to whom the shares represented by the certificate are issued;
shall state the number of shares represented by the certificate; shall
be numbered and shall be in such form as the Board of Directors may,
from time to time, prescribe; shall be signed by the Chairman of the
Board, if one be elected, or the President or a Vice President, and by
the Treasurer or an Assistant Treasurer, or the Secretary or an
Assistant Secretary (or shall clear the facsimile signatures of such
officers); and shall be issued to each stockholder to evidence the
number and class of shares of stock in the Corporation owned by him.
The Board of Directors shall have power to appoint one or more
transfer agents and/or registrars for the transfer and/or registration
of certificates of stock of any class, and may require that stock
certificates shall be
<PAGE>
countersigned and/or registered by one or more of such transfer agents
and/or registrars.
SECTION 2. TRANSFER OF SHARES. The shares of stock of the
Corporation shall be transferable only upon its books by the holders
thereof in person or by their duly authorized attorneys or legal
representatives, and upon such transfer the old certificates shall be
surrendered to the Corporation by the delivery thereof to the person
in charge of the stock and transfer books and ledgers, or to such
person as the Board of Directors may designate, by whom they shall be
cancelled, and new certificates shall thereupon be issued. A record
shall be made of each transfer and whenever a transfer shall be made
for collateral security, and not absolutely, it shall be so expressed
in the entry of the transfer. The Board shall have power and
authority to make all such rules and regulations as it may deem
necessary or proper concerning the issue, transfer and registration of
all or any certificates for shares of stock of the Corporation.
SECTION 3. LOST CERTIFICATES. A new certificate of stock
may be issued in the place of any certificate previously issued by the
Corporation, alleged to have been lost, stolen, destroyed or
mutilated, and the Board of Directors may, in their discretion,
require the owner of the lost, stolen, destroyed or mutilated
certificate, or his legal representatives, to give the
<PAGE>
Corporation a bond, in such sum as they may direct, not exceeding
double the value of the stock, to indemnify the Corporation against
any claim that may be made against it on account of the alleged loss
or mutilation of any such certificate, or the issuance of any such new
certificate.
SECTION 4. STOCKHOLDERS OF RECORD. The Corporation shall
be entitled to treat the holder of record of any share or shares of
stock as the holder thereof, in fact, and shall not be bound to
recognize any equitable or other claim to or interest in such shares
on the part of any other person, whether or not it shall have express
or other notice thereof, except as otherwise expressly provided by
law.
SECTION 5. STOCKHOLDERS RECORD DATE. In order that the
Corporation may determine the stockholders entitled to notice of or to
vote at any meeting of stockholders or any adjournment thereof, or to
express consent to corporate action in writing without a meeting, or
entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect
of any change, conversion or exchange of stock or for the purpose of
any other lawful action, the Board of Directors may fix a record date,
which shall not be more than sixty (60) nor less than ten (10) days
before the date of such meeting, nor more than the sixty (60) days
prior to any other action. A determination of stockholders of record
entitled
<PAGE>
to notice of or to vote at a meeting of stockholders shall apply to
any adjournment of the meeting; provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting.
SECTION 6. DIVIDENDS. Subject to the provisions of the
Articles of Incorporation, the Board of Directors may at any regular
or special meeting, Out of funds legally available therefor, declare
dividends upon the stock of the Corporation as and when they deem
expedient. Before declaring any dividend there may be set apart, out
of any funds of the Corporation available for dividends, such sum or
sums as the directors from time to time in their discretion deem
proper for working capital or as a reserve fund to meet contingencies
or for equalizing dividends of for such other purposes as the
directors shall deem conducive to the interests of the Corporation.
ARTICLE VI
NOTICE AND WAIVER OF NOTICE
SECTION 1. NOTICE. Whenever any written notice is required
to be given by law, the Articles of Incorporation of the Corporation,
the By-laws, if any, or these Regulations, such notice, if mailed,
shall be deemed to be sufficiently given if it is written or printed
and deposited in the United States mail, postage prepaid, addressed to
the person entitled to such notice
<PAGE>
at his address as it appears on the books and records of the
Corporation. Such notice may also be sent by telegram. The mailing
of such notice or posting of such telegram, as the case may be, shall
constitute due notice, which shall be deemed to have been given on the
day of such mailing or posting.
SECTION 2. WAIVER OF NOTICE. Whenever any notice is
required to be given by law, the Articles of Incorporation of the
Corporation, the By-laws, if any, or these Regulations, a written
waiver of notice signed by the person entitled to notice, whether
before or after the time stated in the notice, shall be deemed
equivalent to notice. Attendance of a person at a meeting shall
constitute a waiver of notice of such meeting, unless the person
attends the meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because
the meeting is not lawfully called or convened. Neither the business
to be transacted at, nor the purpose of, any meeting of the
stockholders, directors, or members of a committee of the Board need
be specified in any written waiver of notice.
ARTICLE VII
AMENDMENT OF REGULATIONS
SECTION 1. AMENDMENTS. These Regulations may be amended or
repealed or new Regulations may be adopted by the affirmative vote of
a majority of the Board of Directors at any
<PAGE>
regular or special meeting of the Board. If any Regulation regulating
an impending election of directors is adopted, amended or repealed by
the Board, there shall be set forth in the notice of the next meeting
of shareholders for the election of directors the Regulation(s) so
adopted, amended, or repealed, together with a precise statement of
the changes made. Regulations adopted by Board of Directors may be
amended or repealed by shareholders.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
SECTION 1. SEAL. The seal of the Corporation shall be
circular in form and shall contain the words "FINANCIAL EXCHANGE
COMPANY OF OHIO, INC." on the circumference thereof and the words
"Corporate Seal, Ohio, 1978" in the center thereof.
SECTION 2. FISCAL YEAR. The fiscal year of the Corporation
shall end on December 31st of each year, or such other twelve
consecutive months as the Board of Directors may designate.
SECTION 3. INDEMNIFICATION. The Corporation shall, to the
fullest extent permitted by the General Corporation Law of the State
of Ohio, indemnify members of the Board and may, if authorized by the
Board, indemnify its officers and any and all persons whom it shall
have power to indemnify against any and all expenses, liabilities or
other matters.
NYFS06...:\47\41847\0008\1710\REGD136R.410
Exhibit 3.2(r)(i)
<PAGE>
FINANCIAL EXCHANGE COMPANY OF PENNSYLVANIA, INC.
* * * * *
BY-LAWS
* * * * *
ARTICLE I
OFFICES
Section 1. The registered office shall be located in the
City of Broomall, Commonwealth of Pennsylvania.
Section 2. The corporation may also have offices at such
other places both within and without the Commonwealth of Pennsylvania
as the board of directors may from time to time determine or the
business of the corporation may require.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. All meetings of the shareholders shall be held
at such place within or without the Commonwealth, as may be from time
to time fixed or determined by the board of directors. One or more
shareholders may participate in a meeting of the shareholders by means
of conference telephone or similar communications equipment by means
of which all persons participating in the meeting may hear each other.
Section 2. An annual meeting of the shareholders,
commencing with the year 1998, shall be held on the 2nd Tuesday of May
if not a legal holiday and, if a legal holiday, then on the next
secular day following at 2:00 P.M., when they shall
<PAGE>
elect by a plurality vote a board of directors, and transact such
other business as may properly be brought before the meeting.
Section 3. Special meetings of the shareholders, for any
Purpose or purposes, unless otherwise prescribed by statute or by the
articles of Incorporation, may be called at any time by the chairman
of the board, the president, or a majority of the board of directors,
or the holders of not less than one-fifth of all the shares issued and
outstanding and entitled to vote at the particular meeting, upon
written request delivered to the secretary of the corporation. Such
request shall state the purpose or purposes of the proposed meeting.
Upon receipt of any such request, it shall be the duty of the
secretary to call a special meeting of the shareholders to be held at
such time, not more than sixty days thereafter, as the secretary may
fix. If the secretary shall neglect to issue such call, the person or
persons making the request may issue the call.
Section 4. Written notice of every meeting of the
shareholders, specifying the place, date and hour and the general
nature of the business of the meeting, shall be served upon or mailed,
postage prepaid, at least five days prior to the meeting, unless a
greater period of notice is required by statute, to each shareholder
entitled to vote thereat.
Section 5. The officer having charge of the transfer books
for shares of the corporation shall prepare and make at
<PAGE>
least five days before each meeting of shareholders, a complete list
of the shareholders entitled to vote at the meeting, arranged in
alphabetical order, with the address and the number of shares held by
each which list shall be kept on file at the registered office of the
corporation and shall be subject to inspection by any shareholder at
any time during usual business hours. Such list shall also be
produced and kept open at the time and place of the meeting and shall
be subject to the inspection of any shareholder during the whole time
of the meeting.
Section 6. Business transacted at all special meetings of
shareholders shall be limited to the purposes stated in the notice.
Section 7. The holders of a majority of the issued and
outstanding shares entitled to vote, present in person or represented
by proxy, shall be requisite and shall constitute a quorum at all
meetings of the shareholders for the transaction of business, except
as otherwise provided by statute or by the articles of incorporation
or by these by-laws. If, however, any meeting of shareholders cannot
be organized because a quorum has not attended, the shareholders
entitled to vote thereat, present in person or by proxy, shall have
power, except as otherwise provided by statute, to adjourn the meeting
to such time and place as they may determine, but in the case of any
meeting
<PAGE>
called for the election of directors such meeting may be adjourned
only from day to day or for such longer periods not exceeding fifteen
days each as the holders of a majority of the shares present in person
or by proxy shall direct, and those who attend the second of such
adjourned meetings, although less than a quorum, shall nevertheless
constitute a quorum for the purpose of electing directors. At any
adjourned meeting at which a quorum shall be present or represented
any business may be transacted which might have been transacted at the
meeting as originally notified.
Section 8. When a quorum is present or represented at any
meeting, the vote of the holders of a majority of the shares having
voting powers, present in person or represented by proxy, shall decide
any question brought before such meeting, unless the question is one
upon which, by express provision of the statutes or of the articles of
Incorporation or of these by-laws, a different vote is required in
which case such express provision shall govern and control the
decision of such question.
Section 9. Each shareholder shall at every meeting of the
shareholders be entitled to one vote in person or by proxy for each
share having voting power held by such shareholder, but no proxy shall
be vetoed on after three years from its date, unless coupled with an
interest, and, except where the transfer
<PAGE>
books of the corporation have been closed or a date has been fixed as
a record date for the determination of its shareholders entitled to
vote, transferees of shares which are transferred on the books of the
corporation within ten days next preceding the date of such meeting
shall not be entitled to vote at such meeting.
Section 10. In advance of any meeting of shareholders, the
board of directors may appoint judges of election, who need not be
shareholders, to act at such meeting or any adjournment thereof. If
judges of election be not so appointed, the chairman of any such
meeting may, and on the request of any shareholder or his proxy shall,
make such appointment at the meeting. The number of judges shall be
one or three. If appointed at a meeting on the request of one or more
shareholders or proxies, the majority of shares present and entitled
to vote shall determine whether one or three judges are to be
appointed. No person who is a candidate for office shall act as a
judge. The judges of election shall do all such acts as may be proper
to conduct the election or vote with fairness to all shareholders, and
shall make a written report of any matter determined by them and
execute a certificate of any fact found by them, if requested by the
chairman of the meeting or any shareholder or his proxy. If there be
three judges of election the decision, act or
<PAGE>
certificate of a majority, shall be effected in all respects as the
decision, act or certificate of all.
Section 11. Any action which may be taken at a meeting of
the shareholders may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by all of
the shareholders who would be entitled to vote at a meeting for such
purpose and shall be filed with the secretary of the corporation.
ARTICLE III
DIRECTORS
Section 1. The number of directors which shall constitute
the whole board shall be three (3). The directors shall be elected at
the annual meeting of the shareholders, except as provided in Section
2 of this article, and each director shall hold office until his
successor is elected and qualified. Directors need not be
shareholders.
Section 2. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors
shall be filled by a majority of the remaining number of the board,
though less than a quorum and each person so elected shall be a
director until his successor is elected by the shareholders, who may
make such election at the next annual meeting of the shareholders or
at any special meeting duly called for that purpose and held prior
thereto.
<PAGE>
Section 3. The business of the corporation shall be managed
by its board of directors which may exercise all such powers of the
corporation and do all such lawful acts and things as are not by
statute or by the articles of incorporation or by these by-laws
directed or required to be exercised and done by the shareholders.
MEETINGS OF THE BOARD OF DIRECTORS
Section 4. The board of directors of the corporation may
hold meetings, both regular and special, either within or without the
Commonwealth of Pennsylvania. One or more directors may participate
in a meeting of the board or of a committee of the board by means of
conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other.
Section 5. The first meeting of each newly elected board of
directors shall be held at such time and place as shall be fixed by
the shareholders at the meeting at which such directors were elected
and no notice of such meeting shall be necessary to the newly elected
directors in order legally to constitute the meeting, provided a
majority of the whole board shall be present. In the event of the
failure of the shareholders to fix the time or place of such first
meeting of the newly elected board of directors, or in the event such
meeting is not held at the time and place so fixed by the
<PAGE>
shareholders, the meeting may be held at such time and place as shall
be specified in a notice given as hereinafter provided for such
meetings of the board of directors, or as shall be specified in a
written waiver signed by all of the directors.
Section 6. Regular meetings of the board of directors may
be held without notice at such time and at such place as shall from
time to time be determined by resolution of at least a majority of the
board at a duly convened meeting, or by unanimous written consent.
Section 7. Special meetings of the board may be called by
the chairman of the board or the president on one day notice to each
director, either personally or by mail or by telegram; special
meetings shall be called by the chairman of the board, the president
or the secretary In like manner and on like notice on the written
request of two directors.
Section 8. At all meetings of the board a majority of the
directors in office shall be necessary to constitute a quorum for the
transaction of business, and the acts of a majority of the directors
present at a meeting at which a quorum is present shall be the acts of
the board of directors, except as may be otherwise specifically
provided by statute or by the articles of incorporation. If a quorum
shall not be present at any meeting of directors, the directors
present there at may adjourn the
<PAGE>
meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present.
Section 9. If all the directors shall severally or
collectively consent in writing to any action to be taken by the
corporation, such action shall be as valid a corporate action as
though it had been authorized at a meeting of the board of directors.
COMMITTEES
Section 10. The board of directors may, by resolution
adopted by a majority of the whole board, designate one or more
committees, each committee to consist of two or more of the directors
of the corporation. The board may designate one or more directors as
alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. Any such
committee to the extent provided in such resolution or in these by-
laws, shall have and exercise the authority of the board of directors
in the management of the business and affairs of the corporation. In
the absence or disqualification of any member of such committee or
committees, the member or members thereof present at any meeting and
not disqualified from voting, whether or not he or they constitute a
quorum, may unanimously appoint another director to act at the meeting
in the place of any such absent or disqualified member.
<PAGE>
The committees shall keep regular minutes of the proceedings and
report the same to the board when required.
COMPENSATION OF DIRECTORS
Section 11. Directors, as such, shall not receive any
stated compensation for their services but, by resolution of the
board, a fixed sum, and expenses of attendance if any, may be allowed
for attendance at each regular or special meeting of the board or at
meetings of the executive committee; provided that nothing herein
contained shall be construed to preclude any director from serving the
corporation in any other capacity and receiving compensation therefor.
ARTICLE IV
NOTICES
Section 1. Notices to directors and shareholders shall be
in writing and delivered personally or mailed to the directors or
shareholders at their addresses appearing on the books of the
corporation. Notice by mail shall be deemed to be given at the time
when the same shall be mailed. Notice to directors may also be given
by telegram.
Section 2. Whenever any notice is required to be given
under the provisions of the statutes or of the articles of
incorporation or of these by-laws, a waiver thereof in writing signed
by the person or persons entitled to said notice, whether
<PAGE>
before or after the time stated therein, shall be deemed equivalent
thereto.
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall be chosen
by the board of directors and shall be a chairman of the board, a
president, a vice-president, a secretary, a controller and a
treasurer. The president and secretary shall be natural persons of
full age; the treasurer may be a corporation but, if a natural person,
shall be of full age. The board of directors may also choose
additional vice-presidents and one or more assistant secretaries and
assistant treasurers. Any number of the aforesaid offices may be held
by the same person.
Section 2. The board of directors, immediately after each
annual meeting of shareholders, shall elect a chairman of the board
and a president, and the board shall also annually choose a vice-
president, a secretary and a treasurer who need not be members of the
board.
Section 3. The board of directors may appoint such other
officers and agents as it shall deem necessary who shall hold their
offices for such terms and shall exercise such powers and perform such
duties as shall be determined from time to time by the board.
<PAGE>
Section 4. The officers of the corporation shall hold
office untIl their successors are chosen and qualify. Any officer
elected or appointed by the board of directors may be removed at any
time by the affirmative vote of the majority of the board of
directors. Any vacancy occurring in any office of the corporation
shall be filled by the board of directors.
CHAIRMAN OF THE BOARD
Section 5. The chairman of the board shall be chief
executive officer of the corporation, must be a director of the
corporation, shall preside at all meetings of the board of directors
and of the shareholders and shall have general and active management
of the business of the corporation and shall see that all orders and
resolutions of the board of directors are carried into effect.
THE PRESIDENT
Section 6. The president shall be the chief operating
officer of the corporation, must be a director of the corporation, and
shall have such powers and perform such other duties as from time to
time may be assigned to him by the board of directors or the chairman
of the board. In the absence of the chairman of the board he shall
preside at meetings of the board of directors and of the shareholders.
Section 7. The chairman of the board and the president may
each execute bonds, mortgages and other contracts requiring a
<PAGE>
seal, under the seal of the corporation, except where required or
permitted by law to be otherwise signed and executed and except where
the signing and execution thereof shall be expressly delegated by the
board of directors to some other officer or agent of the corporation.
THE VICE-PRESIDENTS
Section 8. The vice-president, or if there shall be more
than one, the vice-presidents, shall perform such duties and have such
powers as the board of directors or the chairman of the board may from
time to time prescribe.
THE SECRETARY AND ASSISTANT SECRETARIES
Section 9. The secretary shall attend all meetings of the
board of directors and all meetings of the shareholders and record all
the proceedings of the meetings of the shareholders and of the board
of directors in a book to be kept for that purpose and shall perform
like duties for the executive committee when required. He shall give,
or cause to be given, notice of all meetings of the shareholders and
special meetings of the board of directors, and shall perform such
other duties as may be prescribed by the board of directors or the
chairman of the board, under whose supervision he shall be. He shall
keep in safe custody the seal of the corporation and, when authorized
by the board of directors, affix the same to any instrument
<PAGE>
requiring it and, when so affixed, it shall be attested by his
signature or by the signature of an assistant secretary.
Section 10. The assistant secretary, or if there be more
than one, the assistant secretaries in the order determined by the
board of directors or the chairman of the board, shall, in the absence
of the secretary, perform the duties and exercise the powers of the
secretary and shall perform such other duties and have such other
powers as the board of directors or the chairman of the board may from
time to time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 11. The treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the
corporation and shall deposit all moneys and other valuable effects in
the name and to the credit of the corporation in such depositories as
may be designated by the board of directors.
Section 12. He shall disburse the funds of the corporation
as may be ordered by the board of directors, taking procer vouchers
for such disbursements, and shall render to he chairman of the board,
the president and the board of directors, at its regular meetings, or
when the board of directors so requires, an account of all his
transactions as treasurer and of the financial condition of the
corporation.
<PAGE>
Section 13. If required by the board of directors, he shall
give the corporation a bond in such sum and with such surety or
sureties as shall be satisfactory to the board of directors for the
faithful performance of the duties of his office and for the
restoration to the corporation, in case of his death, resignation,
retirement or removal from office, of all books, papers, vouchers,
money and other property of whatever kind in his possession or under
his control belonging to the corporation.
Section 14. The assistant treasurer, or if there shall be
more than one, the assistant treasurers in the order determined by the
board of directors, shall, in the absence or disability of the
treasurer, perform the duties and exercise the powers of the treasurer
and shall perform such other duties and have such other powers as the
board of directors or the chairman of the board may from time to time
prescribe.
CONTROLLER
Section 15. The Controller shall act as the principal
accounting officer of the corporation in charge of general accounting
books and accounting records and shall perform such other duties and
have such other powers as the board of directors may from time to time
prescribe.
<PAGE>
ARTICLE VI
CERTIFICATES OF SHARES
Section 1. The certificates of shares of the corporation
shall be numbered and registered in a share register as they are Is
sued. They shall exhibit the name of the registered holder and the
number and class of shares and the series, if any, represented thereby
and the par value of each share or a statement that such shares are
without par value as the case may be. If more than one class of
shares is authorized, the certIficate shall state that the corporation
will furnish to any shareholder, upon request and without charge a
full or summary statement of the designatIons, preferences,
limitations, and relative rights of the shares of each class
authorized to be issued, and the variations thereof between the shares
of each series, and the authority of the board of directors to fix and
determine the relative rights and preferences of subsequent series.
Section 2. Every share certificate shall be signed by the
chairman of the board, the president or vice-president and the
secretary or an assistant secretary or the treasurer or an assistant
treasurer and shall be sealed with the corporate seal which may be
facsimile, engraved or printed.
Section 3. Where a certificate is signed by a transfer
agent or an assistant transfer agent or a registrar, the signature of
any such chairman of the board, president, vice-president, treasurer,
assistant treasurer, secretary or assistant
<PAGE>
secretary may be facsimile. In case any officer or officers who have
signed, or whose facsimile signature or signatures have been used on,
any such certificate or certificates shall cease to be such officer or
officers of the corporation, whether because of death, resignation or
otherwise, before such certificate or certificates have been delivered
by the corporation such certificate or certificates may nevertheless
be adopted by the corporation and be issued and delivered as though
the person or persons who signed such certificate or certificates or
whose facsimile signature or signatures have been used thereon had not
ceased to be such officer or officers of the corporation.
LOST CERTIFICATES
Section 4. The board of directors shall direct a new
certificate or certificates to be issued in place of any certificate
or certificates theretofore issued by the corporation alleged to have
been lost, destroyed or wrongfully taken, upon the making of an
affidavit of that fact by the person claiming the share certIficate to
be lost, destroyed or wrongfully taken. When authorizing such issue
of a new certificate or certificates, the board of directors may, in
its discretion and as a condition precedent to the issuance thereof,
require the owner of such lost, destroyed or wrongfully taken,
certificate or certificates, or his legal representatives to advertise
the same in such manner as it shall require and give the corporation a
bond in such sum
<PAGE>
as it may direct as indemnity against any claim that may be made
against the corporation with respect to the certificate or
certificates alleged to have been lost, destroyed or wrongfully taken.
TRANSFERS OF SHARES
Section 5. Upon surrender to the corporation or the
transfer agent of the corporation of a certificate for shares duly
endorsed or accompanied by proper evidence of success ion, assignment
or authority to transfer, it shall be the duty of the corporation to
issue a new certificate to the person entitled thereto, cancel the old
certificate and record the transaction upon its books.
CLOSING OF TRANSFER BOOKS
Section 6. The board of directors may fix a time, not more
than fifty days, prior to the date of any meeting of shareholders or
the date fixed for the payment of any dividend or distribution or the
date for the allotment of rights or the date when any change or
conversion or exchange of shares will be made or go into effect, as a
record date for the determination of the shareholders entitled to
notice of and to vote at any such meeting or entitled to receive
payment of any such dividend or distribution or to receive any such
allotment of rights or to exercise the rights in respect to any such
change, conversion or exchange of shares. In such case only such
shareholders as shall
<PAGE>
be shareholders of record on the date so fixed shall be entitled to
notIce of and to vote at such meeting or to receive payment of such
dividend or to receive such allotment of rights or to exercise such
rights, as the case may be, notwithstanding any transfer of any shares
on the books of the corporation after any record date so fixed. The
board of directors may close the books of the corporation against
transfers of shares during the whole or any part of such period and in
such case written or printed notice thereof shall be mailed at least
ten days before the closing thereof to each shareholder of record at
the address appearing on the records of the corporation or supplied by
him to the corporation for the purpose of notice.
REGISTERED SHAREHOLDERS
Section 7. The corporation shall be entitled to treat the
holder of record of any share or shares as the holder in fact thereof
and shall not be bound to recognize any equitable or other claim to or
interest in such share on the part of any other person, and shall not
be liable for any registration or transfer of shares which are
registered or to be registered in the name of a fiduciary or the
nominee of a fiduciary unless made with actual knowledge that a
fiduciary or nominee of a fiduciary is committing a breach of trust in
requesting such registration or transfer, or with knowledge of such
facts that its participation therein amounts to bad faith.
<PAGE>
ARTICLE VII
GENERAL PROVISIONS
DIVIDENDS
Section 8. Dividends upon the shares of the corporation,
subject to the provisions of the articles of incorporation, if any,
may be declared by the board of directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property
or in its shares, subject to the provisions of the articles of
incorporation.
Section 9. Before payment of any dividend, there may be set
aside out of any funds of the corporation available for dividends such
sum or sums as the directors from time to time, in their absolute
discretion, think proper as a reserve or reserves to meet
contingencies, or for equalizing dividends, or for repairing or
maintainIng any property of the corporation, or for such other purpose
as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve
in the manner in which it was created.
FINANCIAL REPORT TO SHAREHOLDERS
Section 10. The directors shall not be required to send, or
cause to be sent, to the shareholders, a financial report as of the
closing date of the preceding fiscal year.
<PAGE>
CHECKS
Section 11. All checks or demands for money and notes of
the corporation shall be signed by such officer or officers or such
other person or persons as the board of directors may from time to
time designate.
FISCAL YEAR
Section 12. The fiscal year of the corporation shall be
fixed by resolution of the board of directors.
SEAL
Section 13. The corporate seal shall have inscribed thereon
the name of the corporation, the year of its organization and the
words "Corporate Seal, Pennsylvania". The seal may be used by causing
it or a facsimile thereof to be impressed or affixed or reproduced or
otherwise.
ARTICLE VIII
AMENDMENTS
Section 14. These by-laws may be altered, amended or
repealed by a majority vote of the shareholders entitled to vote
thereon at any regular or special meeting duly convened after notice
to the shareholders of that purpose or by a majority vote of the
members of the board of directors at any regular or special meeting
duly convened after notice to the directors of that purpose, subject
always to the power of the shareholders to change such action by the
directors.
NYFS06...:\47\41847\0008\1710\CNTD156S.270
Exhibit 3.2(s)(i)
<PAGE>
BY-LAWS
OF
FINANCIAL EXCHANGE COMPANY OF PITTSBURGH, INC.
(A DELAWARE CORPORATION)
-----------------------------------------------
ARTICLE I
Meetings of Stockholders
-------------------------
SECTION 1. Annual Meeting. The annual meeting of the
--------------
stockholders of Financial Exchange Company of Pittsburgh, Inc.
(hereinafter, the "Corporation") for the election of directors and for
the transaction of such other proper business shall be held on such
date and at such time as may be fixed by the Board of Directors or if
no date and time are so fixed on the second Tuesday in March of each
year, if not a legal holiday, and if a legal holiday, then on the next
succeeding day not a legal holiday, at the office of the Corporation
or at such other place, and at such hour as shall be designated by the
Board of Directors, or, if no such time be fixed, then at 10:00 in the
forenoon.
SECTION 2. Special Meetings. Special meetings of the
----------------
stockholders, unless otherwise prescribed by statute, may be called at
any time by the Board of Directors or by the holder or holders of more
than a majority of the outstanding shares of Common Stock entitled to
vote at such meeting.
<PAGE>
SECTION 3. Notice of Meetings. Written notice of each
------------------
meeting of the Stockholders, which shall state the place, date and
hour of the meeting and the purpose or purposes for which it is
called, shall be given not less than ten nor more than sixty days
before the date of such meeting to each stockholder entitled to vote
at such meeting, and, if mailed, it shall be deposited in the United
States mail, postage prepaid, directed to the stockholder at his
address as it appears on the records of the Corporation. Any such
notice for any meeting other than the annual meeting shall indicate
that it is being issued at the direction of the Board. Whenever
notice is required to be given, a written waiver thereof signed by the
person entitled thereto, whether before or after the time stated
therein, shall be deemed equivalent to notice. Attendance of a person
at a meeting shall constitute a waiver of notice of such meeting,
except when the person attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened. When
a meeting is adjourned to another time or place, notice need not be
given if the time and place thereof are announced at the meeting at
which the adjournment is taken. If the adjournment is for more than
thirty days, or if after the adjournment a new record date is fixed
for the adjourned meeting, a notice of the
<PAGE>
adjourned meeting shall be given to each stockholder of record
entitled to vote at the meeting.
SECTION 4. Quorum. At any meeting of the stockholders the
------
holders of the majority of the shares, issued and outstanding and
entitled to vote, shall be present in person or represented by proxy
in order to constitute a quorum for the transaction of any business.
In the absence of a quorum, the holders of a majority of the shares
present in person or represented by proxy and entitled to vote may
adjourn the meeting from time to time. At any such adjourned meeting
at which a quorum may be present, the Corporation may transact any
business which might have been transacted at the original meeting.
SECTION 5. Organization. At each meeting of the
------------
stockholders, the Chairman of the Board, or in his absence or
inability to act, the President or, in his absence or inability to
act, a Vice President or, in his absence of inability to act, any
person chosen by the majority of those stockholders present in person
or represented by proxy shall act as chairman of the meeting. The
Secretary or, in his absence or inability to act, any person appointed
by the chairman of the meeting shall act as secretary of the meeting
and keep the minutes thereof.
SECTION 6. Order of Business. The order of business at all
-----------------
meetings of the stockholders shall be as determined by the chairman of
the meeting.
<PAGE>
SECTION 7. Voting. Unless otherwise provided in the
------
Certificate of Incorporation, and subject to statute, each stockholder
shall be entitled to one vote for each share of capital stock held by
such stockholder:
(a) on the date fixed pursuant to the provisions of
Section 5 of Article V of these By-Laws as the record date
for the determination of the stockholders to be entitled to
notice of or to vote at such meeting; or
(b) if no record date is fixed, then at the close of
business on the day next preceding the day on which notice
is given.
Each stockholder entitled to vote at any meeting of stockholders or to
express consent or dissent to corporate action in writing without a
meeting may authorize another person or persons to act for him by
proxy. Any such proxy shall be delivered to the secretary of such
meeting at or prior to the time designated in the order of business
for so delivering such proxies. Except as otherwise required by
statute or by the Certificate of Incorporation, a majority of the
votes cast at a meeting of the stockholders shall be necessary to
authorize any corporate action to be taken by vote of the
stockholders. Unless required by statute, or determined by the
chairman of the meeting to be advisable, the vote on any question
other than the election of
<PAGE>
directors need not be by ballot. On a vote by ballot, each ballot
shall be signed by the stockholder voting, or by his proxy if there be
such proxy, and shall state the number of shares voted.
SECTION 8. List of Stockholders. A list of the
--------------------
stockholders entitled to vote at any meeting shall be produced and
kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
SECTION 9. Inspectors. The Board may, in advance of any
----------
meeting of stockholders, appoint one or more inspectors to act at such
meeting or any adjournment thereof. If the inspectors shall not be so
appointed or if any of them shall fail to appear or act, the chairman
of the meeting shall appoint inspectors. Each inspector, before
entering upon the discharge of his duties, shall take and sign an oath
faithfully to execute the duties of inspector at such meeting with
strict impartiality and according to the best of his ability. The
inspectors shall determine the number of shares outstanding and the
voting power of each, the number of shares represented at the meeting,
the existence of a quorum, the validity and effect of proxies, and
shall receive votes, ballots or consents, hear and determine all
challenges and questions arising in connection with the right to vote,
count and tabulate all votes, ballots or consents,
<PAGE>
determine the result, and do such acts as are proper to conduct the
election or vote with fairness to all stockholders. On request of the
chairman of the meeting or any stockholder entitled to vote thereat,
the inspectors shall make a report in writing of any challenge,
question or matter determined by them and shall execute a certificate
of any fact found by them. No director or candidate for the office of
director shall act as an inspector of an election of directors.
Inspectors need not be stockholders.
ARTICLE II
Board of Directors
-------------------
SECTION 1. General Powers. The business and affairs of the
--------------
Corporation shall be managed by or under the direction of a Board of
Directors. The Board may exercise all such authority and powers of
the Corporation and do all such lawful acts and things as are not by
statute or the Certificate of Incorporation directed or required to be
exercised or done by the stockholders.
SECTION 2. Number, Qualifications, Election and Term of
--------------------------------------------
Office. The Board of Directors shall consist of at least one, but no
------
more than six Directors, as determined by a majority vote of the
entire Board of Directors, which number may be increased and decreased
as provided in Section 2 of this Article. Each
<PAGE>
director shall hold office until the annual meeting of stockholders of
the Corporation next succeeding his election or until his successor is
duly elected and qualified. Directors need not be stockholders.
The Board of Directors, by the vote of a majority of the
entire Board, may increase the number of Directors to a number not
exceeding six, and may elect Directors to fill the vacancies created
by any such increase in the number of Directors until the next annual
meeting or until their successors are duly elected and qualify. The
Board of Directors, by the vote of a majority of the entire Board, may
decrease the number of Directors to a number not less than one, but
any such decrease shall not affect the term of office of any Director.
Vacancies occurring by reason of any such increase or decrease shall
be filled in accordance with Section 13 of this Article II.
SECTION 3. Place of Meeting. The Board of Directors shall
----------------
hold its meetings at such place, within or without the State of
Delaware, as it may from time to time determine or as shall be
specified in the notice of any such meeting.
SECTION 4. Annual Meeting. The Board shall meet for the
--------------
purpose of organization, the election of officers and the transaction
of other business as soon as practicable after each annual meeting of
the stockholders, on the same day and at the same place where such
annual meeting shall be held. Notice of
<PAGE>
such meeting need not be given. Such meeting may be held at any other
time or place, within or without the State of Delaware, which shall be
specified in a notice thereof given as hereinafter provided in Section
7 of this Article II.
SECTION 5. Regular Meetings. Regular meetings of the Board
----------------
shall be held at such time as the Board may fix. If any day fixed for
a regular meeting shall be a legal holiday at the place where the
meeting is to be held, then the meeting which would otherwise be held
on that day shall be held at the same hour on the next succeeding
business day. Notice of regular meetings of the Board need not be
given except as otherwise required by statute or these By-Laws.
SECTION 6. Special Meetings. Special meetings of the Board
----------------
may be called by the Chairman of the Board, the President or by a
majority of the entire Board.
SECTION 7. Notice of Meetings. Notice of each special
------------------
meeting of the Board (and of each regular meeting for which notice
shall be required) shall be given by the Secretary as hereinafter
provided in this Section 7, in which notice shall be stated the time
and place of the meeting. Except as otherwise required by these By-
laws, such notice need not state the purposes of such meeting. Notice
of each such meeting shall be mailed, postage prepaid, to each
director, addressed to him at his residence or usual place of
business, by first-class mail, at
<PAGE>
least two (2) days before the day on which such meeting is to be held,
or shall be sent addressed to him at such place by telegraph, telex,
cable or wireless, or be delivered to him personally, by facsimile or
by telephone, at least 24 hours before the time at which such meeting
is to be held. A written waiver of notice, signed by the director
entitled to notice, whether before or after the time stated therein,
shall be deemed equivalent to notice. Notice of any such meeting need
not be given to any director who shall, either before or after the
meeting, submit a signed waiver of notice or who shall attend such
meeting without protesting, prior to or at its commencement, the lack
of notice to him.
SECTION 8. Quorum and Manner of Acting. Except as
---------------------------
hereinafter provided, a majority of the entire Board shall be present
in person or by means of a conference telephone or similar
communications equipment which allows all persons participating in the
meeting to hear each other at the same time at any meeting of the
Board in order to constitute a quorum for the transaction of business
at such meeting; and, except as otherwise required by statute or the
Certificate of Incorporation, the act of a majority of the directors
present at any meeting at which a quorum is present shall be the act
of the Board. In the absence of a quorum at any meeting of the Board,
a majority of the directors present thereat may adjourn such
<PAGE>
meeting to another time and place. Notice of the time and place of
any such adjourned meeting shall be given to the directors who were
not present at the time of the adjournment and, unless such time and
place were announced at the meeting at which the adjournment was
taken, to the other directors. At any adjourned meeting at which a
quorum is present, any business may be transacted which might have
been transacted at the meeting as originally called. The directors
shall act only as a Board and the individual directors shall have no
power as such.
SECTION 9. Action Without a Meeting. Any action required
------------------------
or permitted to be taken at any meeting of the Board of Directors may
be taken without a meeting if all members of the Board consent thereto
in writing, and the writing or writings are filed with the minutes of
the Board.
SECTION 10. Telephonic Participation. Members of the Board
------------------------
of Directors may participate in a meeting of the Board by means of a
conference telephone or similar communications equipment allowing all
persons participating in the meeting to hear each other at the same
time. Participation in such a meeting shall constitute presence in
person at such meeting.
SECTION 11. Organization. At each meeting of the Board,
------------
the Chairman of the Board or, in his absence or inability to act, the
President or, in his absence or inability to act, another director
chosen by a majority of the directors present
<PAGE>
shall act as chairman of the meeting and preside thereat. The
Secretary or, in his absence or inability to act, any person appointed
by the chairman shall act as secretary of the meeting and keep the
minutes thereof.
SECTION 12. Resignations. Any director may resign at any
------------
time upon written notice to the Corporation. Any such resignation
shall take effect at the time specified therein or, if the time when
it shall become effective shall not be specified therein, immediately
upon its receipt; and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it
effective.
SECTION 13. Vacancies. Vacancies and newly created
---------
directorships resulting from any increase in the authorized number of
directors may be filled by a majority of the directors then in office,
although less than a quorum, or by a sole remaining director. If
there are no directors in office, then a special meeting of
stockholders for the election of directors may be called and held in
the manner provided by statute. If, at the time of filling any
vacancy or any newly created directorship, the directors then in
office shall constitute less than a majority of the whole Board (as
constituted immediately prior to any such increase), the Court of
Chancery may, upon application of any stockholder or stockholders
holding at least ten percent of the total number of the shares at the
time outstanding having
<PAGE>
the right to vote for such directors, summarily order an election to
be held to fill any such vacancies or newly created directorships, or
to replace the directors chosen by the directors then in office, in
the manner provided by statute. When one or more directors shall
resign from the Board, effective at a future date, a majority of the
directors then in office, including those who have so resigned, shall
have power to fill such vacancy or vacancies, the vote thereon to take
effect when such resignation or resignations shall become effective,
and each director so chosen shall hold office until the next election
of directors and until their successors shall be elected and
qualified.
SECTION 14. Removal of Directors. Except as otherwise
--------------------
provided in the Certificate of Incorporation or in these By-laws, any
director may be removed, either with or without cause, at any time, by
the affirmative vote of the holders of record or a majority of the
issued and outstanding stock entitled to vote for the election of
directors of the Corporation given at a special meeting of the
stockholders called and held for the purpose; and the vacancy in the
Board caused by such removal may be filled by such stockholders at
such meeting, or, if the stockholders shall fail to fill such vacancy,
as in these By-Laws provided.
SECTION 15. Compensation. The Board of Directors shall
------------
have authority to fix the compensation, including fees and
<PAGE>
reimbursement of expenses, of directors for services to the
Corporation in any capacity.
ARTICLE III
Executive and Other Committees
-------------------------------
SECTION 1. Executive and Other Committees. The Board may,
------------------------------
by resolution passed by a majority of the whole Board, designate one
or more committees, each committee to consist of two or more of the
directors of the Corporation. The Board may designate one or more
directors as alternate members of any committee, who may replace any
absent or disqualified member at any meeting of the committee. Any
such committee, to the extent provided in the resolution shall have
and may exercise the powers of the Board in the management of the
business and affairs of the Corporation, and may authorize the seal of
the Corporation to be affixed to all papers which may require it;
provided, however, that in the absence or disqualification of any
member of such committee or committees, the member or members thereof
present at any meeting and not disqualified from voting, whether or
not he or they constitute a quorum, may unanimously appoint another
member of the Board to act at the meeting in the place of any such
absent or disqualified member. Each committee shall keep written
minutes of its proceedings and shall report such minutes
<PAGE>
to the Board when required. All such proceedings shall be subject to
revision or alteration by the Board; provided, however, that third
parties shall not be prejudiced by such revision or alteration.
SECTION 2. General. A majority of any committee may
-------
determine its action and fix the time and place of its meetings,
unless the Board shall otherwise provide. Notice of such meeting
shall be given to each member of the committee in the manner provided
for in Article II, Section 7. The Board shall have any power at any
time to fill vacancies in, to change the membership of, or to dissolve
any such committee. Nothing herein shall be deemed to prevent the
Board from appointing one or more committees consisting in whole or in
part of persons who are not directors of the Corporation; provided,
however, that no such committee shall have or may exercise any
authority of the Board.
SECTION 3. Action Without a Meeting. Any action required
------------------------
or permitted to be taken by any committee at a meeting may be taken
without a meeting if all of the members of the committee consent in
writing to the adoption of the resolutions authorizing such action.
The resolutions and written consents thereto shall be filed with the
minutes of the committee.
SECTION 4. Telephone Participation. One or more members of
-----------------------
a committee may participate in a meeting by means of a conference
telephone or similar communications equipment allowing
<PAGE>
all persons participating in the meeting to hear each other at the
same time. Participation by such means shall constitute presence in
person at the meeting.
ARTICLE IV
Officers
---------
SECTION 1. Number and Qualifications. The officers of the
-------------------------
Corporation shall include the Chairman of the Board, the President,
one or more Vice Presidents (including Executive Vice Presidents and
Senior Vice Presidents), the Treasurer and the Secretary. Any number
of offices may be held by the same person. Such officers shall be
elected from time to time by the Board. Each officer shall hold his
office until his successor is elected and qualified or until his
earlier resignation or removal. The Board may from time to time
elect, or delegate to the Chairman of the Board or the President the
power to appoint, such other officers (including one or more Assistant
Treasurers and one or more Assistant Secretaries) and such agents as
may be necessary or desirable for the business of the Corporation.
Such other officers and agents shall have such duties and shall hold
their offices for such terms as may be prescribed by the Board or by
the appointing authority.
<PAGE>
SECTION 2. Resignations. Any officer may resign at any
------------
time upon written notice to the Corporation. Any such resignation
shall take effect at the time specified therein or, if the time when
it shall become effective shall not be specified therein, immediately
upon its receipt; and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it
effective.
SECTION 3. Removal. Any officer or agent of the
-------
corporation may be removed, either with or without cause, at any time,
by the Board at any meeting of the Board or, except in the case of an
officer or agent elected or appointed by the Board, by the Chairman of
the Board or the President.
SECTION 4. Vacancies. Any vacancy occurring in any office
---------
of the Corporation by death, resignation, removal or otherwise, shall
be filled for the unexpired portion of the term of the office which
shall be vacant, in the manner prescribed in these By-laws for the
regular election or appointment to such office.
SECTION 5. The Chairman of the Board. The Chairman of the
-------------------------
Board shall have the general and active supervision and direction over
the other officers, agents and employees and shall see that their
duties are properly performed and shall be the chief executive
officer. He shall, if present, preside at each meeting of the
stockholders and of the Board and shall be an ex
<PAGE>
officio member of all committees of the Board. He shall perform all
duties incident to the office of Chairman of the Board and such other
duties as may from time to time be assigned to him by the Board.
SECTION 6. The President. The President shall be the chief
-------------
operating officer of the Corporation and shall have general and active
supervision and direction over the business operations and affairs of
the Corporation and over its several officers, agents and employees,
subject, however, to the direction of the Chairman of the Board and
the control of the Board of Directors. At the request of the Chairman
of the Board, or in the case of his absence or inability to act, the
President shall perform the duties of the Chairman of the Board and
when so acting shall have all the powers of, and be subject to all the
restrictions upon, the Chairman of the Board. In general, the
President shall have such other powers and shall perform such other
duties as usually pertain to the office of President or as from time
to time may be assigned to him by the Board, the Chairman of the Board
or these By-Laws.
SECTION 7. Vice Presidents. Each Vice President shall have
---------------
such powers and perform such duties as from time to time may be
assigned to him by the Board.
<PAGE>
SECTION 8. The Treasurer. The Treasurer shall
-------------
(a) have charge and custody of, and be responsible
for, all the funds and securities of the Corporation;
(b) keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation;
(c) cause all monies and other valuables to be
deposited to the credit of the Corporation in such
depositories as may be designated by the Board;
(d) receive, and give receipts for, monies due and
payable to the Corporation from any source whatsoever;
(e) disburse the funds of the Corporation and
supervise the investment of its funds as ordered or
authorized by the Board, taking proper vouchers therefor;
and
(f) in general, have all the powers and perform all
the duties incident to the office of Treasurer and such
other duties as from time to time may be assigned to him by
the Board, the Chairman of the Board or the President.
<PAGE>
SECTION 9. The Secretary. The Secretary shall
-------------
(a) record the proceedings of the meetings of the
stockholders and directors in a minute book to be kept for
that purpose;
(b) see that all notices are duly given in accordance
with the provisions of these By-laws and as required by law;
(c) be custodian of the records and the seal of the
Corporation and affix and attest the seal to all stock
certificates of the Corporation (unless the seal of the
Corporation on such certificates shall be a facsimile, as
hereinafter provided) and affix and attest the seal to all
other documents to be executed on behalf of the Corporation
under its seal;
(d) see that the books, reports, statements,
certificates and other documents and records required by law
to be kept and filed are properly kept and filed; and
(e) in general, have all the powers and perform all
the duties incident to the office of Secretary and such
other duties as from time to time may be assigned to him by
the Board, the Chairman of the Board or the President.
<PAGE>
SECTION 10. Officers' Bonds or Other Security. The Board
---------------------------------
may secure the fidelity of any or all of its officers or agents by
bond or otherwise, in such amount and with such surety or sureties as
the Board may require.
SECTION 11. Compensation. The compensation of the officers
------------
of the Corporation for their services as such officers shall be fixed
from time to time by the Board; provided, however, that the Board may
delegate to the Chairman of the Board or the President the power to
fix the compensation of officers and agents appointed by the Chairman
of the Board or the President, as the case may be. An officer of the
Corporation shall not be prevented from receiving compensation by
reason of the fact that he is also a director of the Corporation, but
any such officer who shall also be a director (except in the event
there is only one director of the Corporation) shall not have any vote
in the determination of the amount of compensation paid to him.
ARTICLE V
Shares, etc.
-------------
SECTION 1. Stock Certificates. Every holder of stock in
------------------
the Corporation shall be entitled to have a certificate signed by or
in the name of the Corporation by the Chairman of the Board or the
President or a Vice President, and by the Treasurer or an
<PAGE>
Assistant Treasurer, or the Secretary or an Assistant Secretary,
certifying the number of shares owned by him in the Corporation. Any
of or all the signatures on the certificate may be a facsimile. In
case any officer, transfer agent or registrar who has signed or whose
facsimile signature has been placed upon such certificate shall have
ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may nevertheless be issued by the
Corporation with the same effect as if he were such officer, transfer
agent or registrar at the date of issue.
SECTION 2. Books of Account and Record of Stockholders.
-------------------------------------------
The books and records of the Corporation may be kept at such places,
within or without the State of Delaware, as the Board of Directors may
from time to time determine. The stock record books and the blank
stock certificate books shall be kept by the Secretary or by any other
officer or agent designated by the Board of Directors.
SECTION 3. Transfer of Shares. Transfers of shares of
------------------
stock of the Corporation shall be made on the stock records of the
Corporation only upon authorization by the registered holder thereof,
or by his attorney thereunto authorized by power of attorney duly
executed and filed with the Secretary or with a transfer agent or
transfer clerk, and on surrender of the certificate or certificates
for such shares properly endorsed or
<PAGE>
accompanied by a duly executed stock transfer power and the payment of
all taxes thereon. Except as otherwise provided by law, the
Corporation shall be entitled to recognize the exclusive right of a
person in whose name any share or shares stand on the record of
stockholders as the owner of such share or shares for all purposes,
including, without limitation, the rights to receive dividends or
other distributions, and to vote as such owner, and the Corporation
may hold any such stockholder of record liable for calls and
assessments and the Corporation shall not be bound to recognize any
equitable or legal claim to or interest in any such shares or shares
on the part of any other person whether or not it shall have express
or other notice thereof. Whenever any transfers of shares shall be
made for collateral security and not absolutely, and both the
transferor and transferee request the Corporation to do so, such fact
shall be stated in the entry of the transfer.
SECTION 4. Regulations. The Board may make such additional
-----------
rules and regulations, not inconsistent with these By-laws, as it may
deem expedient concerning the issue, transfer and registration of
certificates for shares of stock of the Corporation. It may appoint,
or authorize any officer or officers to appoint, one or more transfer
agents or one or more transfer clerks and one or more registrars and
may require all
<PAGE>
certificates for shares of stock to bear the signature or signatures
of any of them.
SECTION 5. Fixing of Record Date. In order that the
---------------------
Corporation may determine the stockholders entitled to notice of or to
vote at any meeting of stockholders or any adjournment thereof, or
entitled to express consent to corporate action in writing without a
meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Directors may
fix, in advance, a record date, which shall not be more than sixty nor
less than ten days before the date of such meeting, nor more than
sixty days prior to any other action.
SECTION 6. Lost, Stolen or Destroyed Stock Certificates.
--------------------------------------------
The holder of any certificate representing shares of stock of the
Corporation shall immediately notify the Corporation of any loss,
destruction or mutilation of such certificate, and the Corporation may
issue a new certificate of stock in the place of any certificate
theretofore issued by it, alleged to have been lost, stolen or
destroyed, and the Board may, in its discretion, require the owner of
the lost, stolen or destroyed certificate, or his legal
representative, to give the Corporation a bond sufficient, as the
Board in its absolute discretion shall
<PAGE>
determine, to indemnify the Corporation against any claim that may be
made against it on account of the alleged loss, theft or destruction
of any such certificate or the issuance of such new certificate.
Anything herein to the contrary notwithstanding, the Board, in its
absolute discretion, may refuse to issue any such new certificate,
except pursuant to judicial proceedings under the laws of the State of
Delaware.
ARTICLE VI
Contracts, Checks, Drafts, Bank Accounts, Etc.
----------------------------------------------
SECTION 1. Execution of Contracts. Except as otherwise
----------------------
required by statute, the Certificate of Incorporation or these By-
Laws, any contract or other instrument may be executed and delivered
in the name and on behalf of the Corporation by such officer or
officers (including any assistant officer) of the Corporation as the
Board may from time to time direct. Such authority may be general or
confined to specific instances as the Board may determine. Unless
authorized by the Board or expressly permitted by these By-Laws, no
officer or agent or employee shall have any power or authority to bind
the Corporation by any contract or engagement or to pledge its credit
or to render it pecuniarily liable for any purpose or to any amount.
<PAGE>
SECTION 2. Loans. Unless the Board shall otherwise
-----
determine, the President or any Vice-President may effect loans and
advances at any time for the Corporation from any bank, trust company
or other institution, or from any firm, corporation or individual, and
for such loans and advances may make, execute and deliver promissory
notes, bonds or other certificates or evidences of indebtedness of the
Corporation, but no officer or officers shall mortgage, pledge,
hypothecate or transfer any securities or other property of the
Corporation other than in connection with the purchase of chattels for
use in the Corporation's operations, except when authorized by the
Board.
SECTION 3. Checks, Drafts, etc. All checks, drafts, bills
-------------------
of exchange or other orders for the payment of money out of the funds
of the Corporation, and all notes or other evidence of indebtedness of
the Corporation, shall be signed in the name and on behalf of the
Corporation by such persons and in such manner as shall from time to
time be authorized by the Board.
SECTION 4. Deposits. All funds of the Corporation not
--------
otherwise employed shall be deposited from time to time to the credit
of the Corporation in such banks, trust companies or other
depositaries as the Board may from time designate or as may be
designated by any officer or officers of the Corporation to whom such
power of designation may from time to time be delegated by the Board.
For the purpose of deposit and for the purpose of
<PAGE>
collection for the account of the Corporation, checks, drafts and
other orders for the payment of money which are payable to the order
of the Corporation may be endorsed, assigned and delivered by any
officer or agent of the Corporation.
SECTION 5. General and Special Bank Accounts. The Board
---------------------------------
may from time to time authorize the opening and keeping of general and
special bank accounts with such banks, trust companies or other
depositaries as the Board may designate or as may be designated by any
officer or officers of the Corporation to whom such power of
designation may from time to time be delegated by the Board. The
Board may make such special rules and regulations with respect to such
bank accounts, not inconsistent with the provisions of these By-Laws,
as it may deem expedient.
ARTICLE VII
Offices
--------
SECTION 1. Registered Office. The registered office and
-----------------
registered agent of the Corporation will be as specified in the
Certificate of Incorporation of the Corporation.
SECTION 2. Other Offices. The Corporation may also have
-------------
such offices, both within or without the State of Delaware,
<PAGE>
as the Board of Directors may from time to time determine or the
business of the Corporation may require.
ARTICLE VIII
Fiscal Year
------------
The fiscal year of the Corporation shall be so determined by
the Board of Directors.
ARTICLE IX
Seal
-----
The seal of the Corporation shall be circular in form, shall
bear the name of the Corporation and shall include the words and
numbers "Corporate Seal", "Delaware" and the year of incorporation.
ARTICLE X
Indemnification
----------------
SECTION 1. General. The Corporation shall indemnify any
-------
person who was or is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or
<PAGE>
investigative, or by or in the right of the Corporation to procure a
judgment in its favor, by reason of the fact that he is or was a
director, officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
Corporation, in accordance with and to the full extent permitted by
statute and by the Certificate of Incorporation of the Corporation.
Expenses incurred in defending a civil or criminal action, suit or
proceeding may be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding as authorized by the
Board of Directors in the specific case upon receipt of an undertaking
by or on behalf of the director, officer, employee or agent to repay
such amount unless it shall ultimately be determined that he is
entitled to be indemnified by the Corporation as authorized in this
section. The indemnification provided by this section shall not be
deemed exclusive of any other rights to which those seeking
indemnification may be entitled under these By-Laws or any agreement
or vote of
<PAGE>
stockholders or disinterested directors or otherwise, both as to
action in his official capacity and as to action in another capacity
while holding such office, and shall continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a
person.
SECTION 2. Insurance. The Corporation may purchase and
---------
maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as
such, whether or not the Corporation would have the power to indemnify
him against such liability under the provisions of statute or of this
section.
ARTICLE XI
Amendment
----------
The By-Laws may be amended, repealed or altered by vote of
the holders of a majority of the shares of stock at the time entitled
to vote in the election of directors, except as otherwise provided in
the Certificate of Incorporation. The By-
<PAGE>
Laws may also be amended, repealed or altered by the Board of
Directors, but any By-Law adopted by the Board of Directors may be
amended, repealed or altered by the stockholders entitled to vote
thereon as herein provided.
<PAGE>
FINANCIAL EXCHANGE COMPANY OF PITTSBURGH, INC.
(A DELAWARE CORPORATION)
ACTION TAKEN BY THE BOARD OF DIRECTORS
---------------------------------------
WITHOUT A MEETING
------------------
We, the undersigned, being all of the directors of Financial
Exchange Company of Pittsburgh, Inc., a Delaware corporation (the
"Corporation") , acting pursuant to Section 141(f) of the General
Corporation Law of the State of Delaware, do hereby waive all notice
of the time, place and purposes of the First Meeting of the Board of
Directors of the Corporation, and hereby consent and agree to the
adoption of the following resolutions:
RESOLVED, that the Organizational Action by the
Incorporator Taken Without a Meeting, dated June 11, 1990,
be, and it hereby is, in all respects approved, and that all
actions taken by the Incorporator be, and they hereby are,
in all respects, approved, ratified and confirmed; and be it
further
RESOLVED, that the By-Laws in the form adopted by the
Incorporator and inserted in the minute book of the
Corporation be, and they hereby are, in all respects
approved and adopted as and for the By-Laws of the
Corporation; and be it further
RESOLVED, that the following persons be, and they
hereby are, elected to the offices of the Corporation set
forth opposite their names, to hold office until the meeting
of the Board of Directors following the first annual meeting
of stockholders and until their
<PAGE>
successors have been duly elected and qualified, or as
otherwise provided in the By-Laws of the Corporation:
Office Name
------ ----
Chairman of the Board Hilary B. Miller
President Edward R. Larkin
Vice President Nathan Pincus
Secretary Gregory Katz
and be it further
RESOLVED, that the proper officers of the Corporation
be, and they hereby are, authorized to open a bank account
or accounts with any bank or banks chosen at their
discretion and approved by the Board of Directors; and be it
further
RESOLVED, that the form of corporate seal, an
impression of which is affixed to the margin of this
Consent, in the form of two concentric circles and bearing
the words and figures "Financial Exchange Company of
Pittsburgh, Inc. 1990 - Delaware" be, and it hereby is,
approved and adopted as and for the corporate seal of the
Corporation; and be it further
RESOLVED, that until otherwise ordered by the Board of
Directors, the form, terms and provisions of the certificate
for shares of Common Stock of the Corporation, $.01 par
value per share (the "Common Stock"), a specimen of which
has been annexed hereto as Exhibit A, be, and it hereby is,
in all respects approved; that a certificate substantially
in such form be, and it hereby is, adopted and prescribed as
the form of certificate to represent fully paid and non-
assessable shares of the Corporation's Common Stock, and
that, until otherwise ordered, by the Board of Directors,
all such certificates representing any shares of its Common
Stock, shall be signed by its Chairman of the Board,
President or any Vice President and by its Secretary or
Treasurer with the corporate
<PAGE>
seal of the Corporation thereunto affixed; and be it further
RESOLVED, that the Corporation sell to Monetary
Management Corporation, a Delaware corporation, One Hundred
(100) shares of its Common Stock, at a price of Ten Dollars
($10.00) per share, or an aggregate purchase price of One
Thousand Dollars ($1,000), and upon receipt of the purchase
price the Corporation shall issue such shares and when such
shares are so issued and sold, they shall be fully paid and
non-assessable and in respect of which the holder thereof
shall not be liable for any further payments or assessments;
and be it further
RESOLVED, that the office of the Corporation Service
Company, 1013 Centre Road, City of Wilmington, County of New
Castle, State of Delaware, be, and it hereby is, designated
as the registered office of the Corporation within the State
of Delaware, and that the Corporation Service Company be,
and it hereby is, appointed the resident agent of the
Corporation in charge of the registered office and the agent
upon whom process against the Corporation may be served in
accordance with the laws of Delaware; and be it further
RESOLVED, that for the purpose of authorizing the
Corporation to qualify to do business as a foreign
corporation in any state, territory or dependency of the
United States or in any foreign country in which, in the
determination of the Board of Directors, it is necessary or
expedient for the Corporation to so qualify to transact
business, the proper officers of the Corporation be, and
they hereby are, authorized to appoint and substitute all
necessary agents or attorneys for service of process, to
designate and change the location of all necessary statutory
offices and, under the corporate seal, to make and file all
necessary certificates, reports, powers of attorney and
other instruments as may be required by the laws of such
state, territory, dependency, country or association of
countries to authorize the Corporation to transact business
therein and withdraw therefrom, to revoke any appointment of
agent or attorney for service of revocation of appointment,
surrender of authority, or other instrument as may be
necessary to terminate the authority of the Corporation to
do business in any such state, territory, dependency,
country or
<PAGE>
association of countries, and that the appropriate officers
take such action as may be required to so qualify the
Corporation to do business in any states where its
applications to do business are granted; and be it further
RESOLVED, that the proper officers of the Corporation
be, and they hereby are, authorized and directed to take all
such further action and to execute and deliver all such
further agreements, instruments and documents in the name
and on behalf of the Corporation and under its corporate
seal or otherwise and to pay all such expenses and taxes, as
in their judgment shall be necessary, proper and advisable
in order fully to carry out the intent and accomplish the
purposes of all the foregoing resolutions, and each of them.
This Consent may be executed in counterparts, all of which
taken together shall constitute one and the same instrument.
IN Witness WHEREOF, we have executed this Consent as of the 11th day
of June, 1990.
/s/ Hilary B. Miller
----------------------------------------
Hilary B. Miller
/s/ Edward R. Larkin
----------------------------------------
Edward R. Larkin
NYFS06...:\47\41847\0008\1710\BYLD146F.420
Exhibit 3.2(t)(i)
<PAGE>
BY-LAWS OF
FINANCIAL EXCHANGE COMPANY OF VIRGINIA, INC.
(a Delaware corporation)
--------------------------------------------------
ARTICLE I
Meetings of Stockholders
-------------------------
SECTION 1. Annual Meeting. The annual meeting of the
--------------
stockholders of FINANCIAL EXCHANGE COMPANY OF VIRGINIA, INC.
(hereinafter referred to as the "Corporation") for the election of
directors and for the transaction of such other business as may
properly come before the meeting shall be held on such date and at
such time as may be fixed by the Board of Directors (hereinafter
referred to as the "Board") or if no date and time are so fixed, on
the second Tuesday in March of each year, if not a legal holiday, and
if a holiday, then on the next succeeding day not a legal holiday, at
the office of the Corporation or at such other place and at such hour
as shall be designated by the Board, or, if no such time be fixed,
then at 10:00 o'clock in the forenoon.
SECTION 2. Special Meetings. Special meetings of the
----------------
stockholders, unless otherwise prescribed by statute, may be called at
any time by the Board or by the holder or holders on the date of the
call of not less than a majority of the issued
<PAGE>
and outstanding shares of Common Stock entitled to vote at such
special meeting.
SECTION 3. Notice of Meetings. Notice of the place, date
------------------
and hour of each annual and special meeting of the stockholders and
the purpose or purposes thereof shall be given personally or by mail
in a postage prepaid envelope, not less than ten or more than sixty
days before the date of such meeting, to each stockholder entitled to
vote at such meeting, and, if mailed, it shall be directed to such
stockholder at his address as it appears on the record of
stockholders, unless he shall have filed with the Secretary of the
Corporation a written request that notices to him be mailed to some
other address. Any such notice for any meeting other than the annual
meeting shall indicate that it is being issued at the direction of the
Board. Notice of any meeting of stockholders shall not be required to
be given to any stockholder who shall attend such meeting in person or
by proxy and shall not, prior to the conclusion of such meeting,
protest the lack of notice thereof, or who shall, either before or
after the meeting, submit a signed waiver of notice, in person or by
proxy. Unless the Board shall fix a new record date for an adjourned
meeting, notice of such adjourned meeting need not be given if the
time and place to which the meeting shall be adjourned were announced
at the meeting at which the adjournment is taken.
<PAGE>
SECTION 4. Quorum. At all meetings of the stockholders the
------
holders of the majority of the shares of Common Stock of the
Corporation, issued and outstanding and entitled to vote, shall be
present in person or by proxy to constitute a quorum for the
transaction of business. In the absence of a quorum, the holders of a
majority of the shares of Common Stock present in person or by proxy
and entitled to vote may adjourn the meeting from time to time. At
any such adjourned meeting at which a quorum may be present any
business may be transacted which might have been transacted at the
meeting as originally called.
SECTION 5. Organization. At each meeting of the
------------
stockholders, the President or in his absence any Vice President of
the Corporation, shall act as chairman of the meeting or, if no one of
the foregoing officers is present, a chairman shall be chosen at the
meeting by the stockholders. The Secretary, or in his absence or
inability to act, the person whom the chairman of the meeting shall
appoint secretary of the meeting, shall act as secretary of the
meeting and keep the minutes thereof.
SECTION 6. Order of Business. The order of business at all
-----------------
meetings of the stockholders shall be as determined by the chairman of
the meeting.
SECTION 7. Voting. Except as otherwise provided by statute
------
or the Certificate of Incorporation, each holder of record of shares
of stock of the Corporation having voting power
<PAGE>
shall be entitled at each meeting of the stockholders to one vote for
every share of such stock standing in his name on the record of
stockholders of the Corporation:
(a) on the date fixed pursuant to the
provisions of Section 5 of Article IV of these By-
Laws as the record date for the determination of
the stockholders who shall be entitled to notice
of and to vote at such meeting; or
(b) if such record date shall not have been
so fixed, then at the close of business on the day
next preceding the day on which notice thereof
shall be given.
Each stockholder entitled to vote at any meeting of stock- holders may
authorize another person or persons to act for him by a proxy signed
by such stockholder or his attorney-in-fact. Any such proxy shall be
delivered to the secretary of such meeting at or prior to the time
designated in the order of business for so delivering such proxies.
Except as otherwise required by statute or by the Certificate of
Incorporation, any corporate action to be taken by vote of the
stockholders shall require the vote of a majority of the votes cast at
a meeting of the holders of the Common Stock of the Corporation
entitled to vote thereon. Unless required by statute, or determined
by the chairman of the meeting
<PAGE>
to be advisable, the vote on any question need not be by ballot. On a
vote by ballot, each ballot shall be signed by the stockholder voting,
or by his proxy, if there be such proxy, and shall state the number of
shares voted.
SECTION 8. List of Stockholders. A list of stockholders as
--------------------
of the record date, certified by the Secretary of the Corporation or
by the transfer agent for the Corporation, shall be produced at any
meeting of the Stockholders upon the request of any stockholder made
at or prior to such meeting.
SECTION 9. Inspectors. The Board may, in advance of any
----------
meeting of stockholders, appoint one or more inspectors to act at such
meeting or any adjournment thereof. If the inspectors shall not be so
appointed or if any of them shall fail to appear or act, the chairman
of the meeting shall appoint inspectors. Each inspector, before
entering upon the discharge of his duties, shall take and sign an oath
faithfully to execute the duties of inspector at such meeting with
strict impartiality and according to the best of his ability. The
inspectors shall determine the number of shares outstanding and the
voting power of each, the number of shares represented at the meeting,
the existence of a quorum, the validity and effect of proxies, and
shall receive votes, ballots or consents, hear and determine all
challenges and questions arising in connection with the right to vote,
count and tabulate all votes, ballots or consents,
<PAGE>
determine the result, and do such acts as are proper to conduct the
election or vote with fairness to all stockholders. On request of the
chairman of the meeting or any stockholder entitled to vote thereat,
the inspectors shall make a report in writing of any challenge,
request or matter determined by them and shall execute a certificate
of any fact found by them. No director or candidate for the office of
director shall act as an inspector of an election of directors.
Inspectors need not be stockholders.
SECTION 10. Consent of Stockholders in Lieu of Meeting.
---------------------------------- -------
Any action required or permitted to be taken at any annual or special
meeting of stockholders of the Corporation may be taken without a
meeting, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken, shall be signed by the
holders of outstanding stock having not less than the minimum number
of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and
voted. Prompt notice of the taking of the corporate action without a
meeting by less than unanimous written consent shall be given to those
stockholders, if any, who have not consented in writing.
<PAGE>
ARTICLE II
Board of Directors
-------------------
SECTION 1. General Powers. The business and affairs of the
--------------
Corporation shall be managed under the direction of the Board. The
Board may exercise all such authority and powers of the Corporation
and do all such lawful acts and things as are not by statute or the
Certificate of Incorporation directed or required to be exercised or
done by the stockholders.
SECTION 2. Number, Increase or Decrease Thereto and Term of
------------------------------------------------
Office. The Board of Directors shall consist of at least two (2), but
------
no more than five (5) Directors, as determined by a majority vote of
the entire Board of Directors, which number may be increased and
decreased as provided in Section 2 of this Article. Each director
shall hold office until the annual meeting of stockholders of the
Corporation next succeeding his election or until his successor is
duly elected and qualified. Directors need not be stockholders.
The Board of Directors, by the vote of a majority of the
entire Board, may increase the number of Directors to a number not
exceeding five (5), and may elect Directors to fill the vacancies
created by any such increase in the number of Directors until the next
annual meeting or until their successors are duly elected and qualify.
The Board of Directors, by the vote of a majority of the entire Board,
may decrease the number
<PAGE>
of Directors to a number not less than two (2), but any such decrease
shall not affect the term of office of any Director. Vacancies
occurring by reason of any such increase or decrease shall be filled
in accordance with Section 13 of this Article II.
SECTION 3. Place of Meeting. Meetings of the Board shall
----------------
be held at the principal office of the Corporation in the State of
Delaware or at such other place, within or without such state, as the
Board may from time to time determine or as shall be specified in the
notice of any such meeting.
SECTION 4. Annual Meeting. The Board shall meet for the
--------------
purpose of organization, the election of officers and the transaction
of other business, as soon as practicable after each annual meeting of
the stockholders, on the same day and at the same place where such
annual meeting shall be held. Notice of such meeting need not be
given. Such meeting may be held at any other time or place (within or
without the State of Delaware) which shall be specified in a notice
thereof given as hereinafter provided in Section 7 of this Article II.
SECTION 5. Regular Meeting. Regular meetings of the Board
---------------
shall be held at such time as the Board may fix. If any day fixed for
a regular meeting shall be a legal holiday at the place where the
meeting is to be held, then the meeting which would otherwise be held
on that day shall be held at the same hour on the next succeeding
business day. Notice of regular
<PAGE>
meetings of the Board need not be given except as otherwise required
by statute or these By-Laws.
SECTION 6. Special Meetings. Special meetings of the Board
----------------
may be called by the President or by a majority of the entire Board.
SECTION 7. Notice of Meetings. Notice of each special
------------------
meeting of the Board (and of each regular meeting for which notice
shall be required) shall be given by the Secretary as hereinafter
provided in this Section 7, in which notice shall be stated the time
and place of the meeting. Except as otherwise required by these By-
Laws, such notice need not state the purposes of such meeting. Notice
of each such meeting shall be mailed, postage prepaid, to each
director, addressed to him at his residence or usual place of
business, by first-class mail, at least two days before the day on
which such meeting is to be held, or shall be sent addressed to him at
such place by facsimile telegraph, telex, cable or wireless, or be
delivered to him personally or by telephone, at least 24 hours before
the time at which such meeting is to be held. A written waiver of
notice, signed by the director entitled to notice, whether before or
after the time stated therein shall be deemed equivalent to notice.
Notice of any such meeting need not be given to any director who
shall, either before or after the meeting, submit a signed waiver of
notice or who shall attend such meeting without
<PAGE>
protesting, prior to or at its commencement, the lack of notice to
him.
SECTION 8. Quorum and Manner of Acting. Except as
---------------------------
hereinafter provided, a majority of the entire Board shall be present
in person or by means of a conference telephone or similar
communications equipment which allows all persons participating in the
meeting to hear each other at the same time at any meeting of the
Board in order to constitute a quorum for the transaction of business
at such meeting; and, except as otherwise required by statute or the
Certificate of Incorporation, the act of a majority of the directors
present at any meeting at which a quorum is present shall be the act
of the Board. In the absence of a quorum at any meeting of the Board,
a majority of the directors present thereat may adjourn such meeting
to another time and place. Notice of the time and place of any such
adjourned meeting shall be given to the directors who were not present
at the time of the adjournment and, unless such time and place were
announced at the meeting at which the adjournment was taken, to the
other directors. At any adjourned meeting at which a quorum is
present, any business may be transacted which might have been
transacted at the meeting as originally called. The directors shall
act only as a Board and the individual directors shall have no power
as such.
<PAGE>
SECTION 9. Action Without a Meeting. Any action required
------------------------
or permitted to be taken by the Board at a meeting may be taken
without a meeting if all members of the Board consent in writing to
the adoption of the resolutions authorizing such action. The
resolutions and written consents thereto shall be filed with the
minutes of the Board.
SECTION 10. Telephonic Participation. One or more members
------------------------
of the Board may participate in a meeting by means of a conference
telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time.
Participation by such means shall constitute presence in person at the
meeting.
SECTION 11. Organization. At each meeting of the Board,
------------
the President or, in his absence, another director chosen by a
majority of the directors present shall act as chairman of the meeting
and preside thereat. The Secretary (or, in his absence, any person
who shall be an Assistant Secretary, if any of them shall be present
at such meeting appointed by the chairman) shall act as secretary of
the meeting and keep the minutes thereof.
SECTION 12. Resignations. Any director of the Corporation
------------
may resign at any time by giving written notice of his resignation to
the Board or the President or the Secretary. Any such resignation
shall take effect at the time specified therein
<PAGE>
or, if the time when it shall become effective shall not be specified
therein, immediately upon its receipt, and, unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to
make it effective.
SECTION 13. Vacancies. Vacancies and newly created
---------
directorships resulting from any increase in the authorized number of
directors may be filled by a majority of the directors then in office,
although less than a quorum, or by a sole remaining director. If
there are no directors in office, then a special meeting of
stockholders for the election of directors may be called and held in
the manner provided by statute. If, at the time of filling any
vacancy or any newly created directorship, the directors then in
office shall constitute less than a majority of the whole Board (as
constituted immediately prior to any such increase), the Court of
Chancery may, upon application of any stockholder or stockholders
holding at least ten percent of the total number of the shares at the
time outstanding having the right to vote for such directors,
summarily order an election to be held to fill any such vacancies or
newly created directorships, or to replace the directors chosen by the
directors then in office, in the manner provided by statute. When one
or more directors shall resign from the Board, effective at a future
date, a majority of the directors then in office, including those who
have so resigned, shall have power to fill
<PAGE>
such vacancy or vacancies, the vote thereon to take effect when such
resignation or resignations shall become effective, and each director
so chosen shall hold office until the next election of directors and
until their successors shall be elected and qualified.
SECTION 14. Removal of Directors. Except as otherwise
--------------------
provided in the Certificate of Incorporation or in these By-Laws, any
director may be removed, either with or without cause, at any time, by
the affirmative vote of the holders of record of a majority of the
issued and outstanding stock entitled to vote for the election of
directors of the Corporation given at a special meeting of the
stockholders called and held for the purpose; and the vacancy in the
Board caused by such removal may be filled by such stockholders at
such meeting, or, if the stockholders shall fail to fill such vacancy,
as in these By-Laws provided.
SECTION 15. Compensation. The Board shall have authority
------------
to fix the compensation, including fees and reim-bursement of
expenses, of directors for services to the Corporation in any
capacity.
<PAGE>
ARTICLE III
Executive and Other Committees
-------------------------------
SECTION 1. Executive and other Committees. The Board may,
------------------------------
by resolution passed by a majority of the whole Board, designate one
or more committees, each committee to consist of two or more of the
directors of the Corporation. The Board may designate one or more
directors as alternate members of any committee, who may replace any
absent or disqualified member at any meeting of the committee. Any
such committee, to the extent provided in the resolution shall have
and may exercise the powers of the Board in the management of the
business and affairs of the Corporation, and may authorize the seal of
the Corporation to be affixed to all papers which may require it;
provided, however, that in the absence or disqualification of any
member of such committee or committees, the member or members thereof
present at any meeting and not disqualified from voting, whether or
not he or they constitute a quorum, may unanimously appoint another
member of the Board to act at the meeting in the place of any such
absent or disqualified member. Each committee shall keep written
minutes of its proceedings and shall report such minutes to the Board
when required. All such proceedings shall be subject to revision or
alteration by the Board; provided, however, that third parties shall
not be prejudiced by such revision or alteration.
<PAGE>
SECTION 2. General. A majority of any committee may
-------
determine its action and fix the time and place of its meetings,
unless the Board shall otherwise provide. Notice of such meeting
shall be given to each member of the committee in the manner provided
for in Article II, Section 7. The Board shall have any power at any
time to fill vacancies in, to change the membership of, or to dissolve
any such committee. Nothing herein shall be deemed to prevent the
Board from appointing one or more committees consisting in whole or in
part of persons who are not directors of the Corporation; provided,
however, that no such committee shall have or may exercise any
authority of the Board.
SECTION 3. Action Without a Meeting. Any action required
------------------------
or permitted to be taken by any committee at a meeting may be taken
without a meeting if all of the members of the committee consent in
writing to the adoption of the resolutions authorizing such action.
The resolutions and written consents thereto shall be filed with the
minutes of the committee.
SECTION 4. Telephone Participation. One or more members of
-----------------------
a committee may participate in a meeting by means of a conference
telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time.
Participation by such means shall constitute presence in person at the
meeting.
<PAGE>
ARTICLE IV
Officers
---------
SECTION 1. Number of Qualifications. The officers of the
------------------------
Corporation shall include the President, one or more Vice Presidents,
the Treasurer, and the Secretary. Any two or more offices may be held
by the same person; except the offices of President and Secretary;
provided that when all of the issued and outstanding stock of the
Corporation is held by one person, such person may hold all or any
combination of offices. Such officers shall be elected from time to
time by the Board, each to hold office until the meeting of the Board
following the next annual meeting of the stockholders, or until his
successor shall have been duly elected and shall have qualified or
until his death, or until he shall have resigned, or have been
removed, as hereinafter provided in these By-Laws. The Board may from
time to time elect, or delegate to the President the power to appoint,
such other officers (including one or more Assistant Treasurers and
one or more Assistant Secretaries) and such agents, as may be
necessary or desirable for the business of the Corporation. Such
other officers and agents shall have such duties and shall hold their
offices for such terms as may be prescribed by the Board or by the
appointing authority.
SECTION 2. Resignations. Any officer of the Corporation
------------
may resign at any time by giving written notice of his
<PAGE>
resignation to the Board, the President or the Secretary. Any such
resignation shall take effect at the time specified therein or, if the
time when it shall become effective shall not be specified therein,
immediately upon its receipt; and, unless otherwise specified therein,
the acceptance of such resignation shall not be necessary to make it
effective.
SECTION 3. Removal. Any officer or agent of the Cor
-------
poration may be removed, either with or without cause, at any time, by
the Board at any meeting of the Board or, except in the case of an
officer or agent elected or appointed by the Board, by the President.
SECTION 4. Vacancies. A vacancy in any office, whether
---------
arising from death, resignation, removal or any other cause, may be
filled for the unexpired portion of the term of the office which shall
be vacant, in the manner prescribed in these By-Laws for the regular
election or appointment to such office.
SECTION 5. The President. The President shall be the chief
-------------
executive officer of the Corporation and shall have general and active
management of the business and affairs of the Corporation and general
and active supervision and direction over the other officers, agents
and employees and shall see that their duties are properly performed
subject, however, to the control of the Board. He shall perform all
duties incident to the office of
<PAGE>
President and such other duties as from time to time may be assigned
to him by the Board of these By-Laws.
SECTION 6. Vice Presidents. Each Vice President, including
---------------
any Executive Vice President, shall perform all such duties as from
time to time may be assigned to him by the Board.
SECTION 7. The Treasurer. The Treasurer shall
-------------
(a) have charge and custody of, and be
responsible for, all the funds and securities of
the Corporation;
(b) keep full and accurate accounts of
receipts and disbursements in books belonging to
the Corporation;
(c) deposit all monies and other valuables
to the credit of the Corporation in such
depositaries as may be designated by the Board;
(d) receive, and give receipts for, monies
due and payable to the Corporation from any source
whatsoever;
(e) disburse the funds of the Corporation
and supervise the investment of its funds as
ordered or authorized by the Board, taking proper
vouchers therefor; and
<PAGE>
(f) in general, perform all the duties
incident to the office of Treasurer and such other
duties as from time to time may be assigned to him
by the Board or the President.
SECTION 8. The Secretary. The Secretary shall
-------------
(a) keep or cause to be kept in one or more
books provided for the purpose, the minutes of all
meetings of the Board, the committees of the Board
and the stockholders;
(b) see that all notices are duly given in
accordance with the provisions of these By-Laws
and as required by law;
(c) be the custodian of the records and the
seal of the Corporation and affix and attest the
seal to all stock certificates of the Corporation
(unless the seal of the Corporation on such
certificates shall be a facsimile, as hereinafter
provided) and affix and attest the seal to all
other documents to be executed on behalf of the
Corporation under its seal;
(d) see that the books, reports, statements,
certificates and other documents
<PAGE>
and records required by law to be kept and filed are
properly kept and filed; and
(e) in general, perform all the duties
incident to the office of Secretary and such other
duties as from time to time may be assigned to him
by the Board or the President.
SECTION 9. Officers' Bonds or Other Security. If required
---------------------------------
by the Board, any officer of the Corporation shall give a bond or
other security for the faithful performance of his duties, in such
amount and with such surety or sureties as the Board may require.
SECTION 10. Compensation. The compensation of the officers
------------
of the Corporation for their services as such officers shall be fixed
from time to time by the Board; provided, however, that the Board may
delegate to the President the power to fix the compensation of
officers and agents appointed by him. An officer of the Corporation
shall not be prevented from receiving compensation by reason of the
fact that he is also a director of the Corporation, but any such
officer who shall also be a director (except in the event that there
is only one director of the Corporation) shall not have any vote in
the determination of the amount of compensation paid to him.
<PAGE>
ARTICLE V
Shares, Etc.
------------
SECTION 1. Stock Certificates. Each owner of stock of the
------------------
Corporation shall be entitled to have a certificate, in such form as
shall be approved by the Board, certifying the number of shares of
stock of the Corporation owned by him. The certificates representing
shares of stock shall be signed in the name of the Corporation by the
President or a Vice President and by the Secretary, Treasurer or an
Assistant Secretary and sealed with the seal of the Corporation (which
seal may be a facsimile, engraved or printed). In case any officer
who shall have signed such certificates shall have ceased to be such
officer before such certificates shall be issued, they may
nevertheless be issued by the Corporation with the same effect as if
such officer were still in office at the date of their issue.
SECTION 2. Books of Account and Record of Stockholders.
-------------------------------------------
There shall be kept correct and complete books and records of account
of all the business and transactions of the Corporation. The stock
record books and the blank stock certificate books shall be kept by
the Secretary or by any other officer or agent designated by the Board
of Directors.
SECTION 3. Transfers of Shares. Transfers of shares of
-------------------
stock of the Corporation shall be made on the stock records of the
Corporation only upon authorization by the registered holder
<PAGE>
thereof, or by his attorney thereunto authorized by power of attorney
duly executed and filed with the Secretary or with a transfer agent or
transfer clerk, and on surrender of the certificate or certificates
for such shares properly endorsed or accompanied by a duly executed
stock transfer power and the payment of all taxes thereon. The person
in whose name shares of stock shall stand on the record of
stockholders of the Corporation shall be deemed the owner thereof for
all purposes as regards the Corporation. Whenever any transfers of
shares shall be made for collateral security and not absolutely and
written notice thereof shall be given to the Secretary or to such
transfer agent or transfer clerk, such fact shall be stated in the
entry of the transfer.
SECTION 4. Regulations. The Board may make such additional
-----------
rules and regulations, not inconsistent with these By-Laws, as it may
deem expedient concerning the issue, transfer and registration of
certificates for shares of stock of the Corporation. It may appoint,
or authorize any officer or officers to appoint, one or more transfer
agents or one or more transfer clerks and one or more registrars and
may require all certificates for shares of stock to bear the signature
or signatures of any of them.
SECTION 5. Fixing of Record Date. The Board may fix, in
---------------------
advance, a date not more than sixty nor less than ten days
<PAGE>
before the date then fixed for the holding of any meeting of the
stockholders or before the last day on which the consent or dissent of
the stockholders may be effectively expressed for any purpose without
a meeting, as the time as of which the stockholders entitled to notice
of and to vote at such meeting or whose consent or dissent is required
or may be expressed for any purpose, as the case may be, shall be
determined, and all persons who were stockholders of record of voting
stock at such time, and no others, shall be entitled to notice of and
to vote at such meeting or to express their consent or dissent, as the
case may be. The Board may fix, in advance, a date not more than
sixty nor less than ten days preceding the date fixed for the payment
of any dividend or the making of any distribution or the allotment of
rights to subscribe for securities of the Corporation, or for the
delivery of evidence of rights or evidences of interest arising out of
any change, conversion or exchange of capital stock or other
securities, as the record date for the determination of the
stockholders entitled to receive any such dividend, distribution,
allotment, rights or interests, and in such case only the stockholders
of record at the time so fixed shall be entitled to receive such
dividend, distribution, allotment, rights or interests.
SECTION 6. Lost, Destroyed or Mutilated Certificate. The
----------------------------------------
holder of any certificate representing shares of stock of the
<PAGE>
Corporation shall immediately notify the Corporation of any loss,
destruction or mutilation of such certificate, and the Corporation may
issue a new certificate of stock in the place of any certificate
theretofore issued by it which the owner thereof shall allege to have
been lost or destroyed or which shall have been mutilated, and the
Board may, in its discretion, require such owner or his legal
representative to give to the Corporation a bond in such sum, limited
or unlimited, and in such form and with such surety or sureties as the
Board in its absolute discretion shall determine, to indemnify the
Corporation against any claim that may be made against it on account
of the alleged loss or destruction of any such certificate, or the
issuance of such new certificate. Anything herein to the contrary
notwithstanding, the Board, in its absolute discretion, may refuse to
issue any such new certificate, except pursuant to legal proceedings
under the laws of the State of Delaware.
ARTICLE VI
Contracts, Checks, Drafts, Bank Accounts, Etc.
----------------------------------------------
SECTION 1. Execution of Contracts. Except as otherwise
----------------------
required by statute, the Certificate of Incorporation or these By-
Laws, any contract or other instrument may be executed and delivered
in the name and on behalf of the Corporation by such officer or
officers (including any assistant officer) of the
<PAGE>
Corporation as the Board may from time to time direct. Such authority
may be general or confined to specific instances as the Board may
determine. Unless authorized by the Board or expressly permited by
these By-Laws, no officer or agent or employee shall have any power or
authority to bind the Corporation by any contract or engagement or to
pledge its credit or to render it pecuniarily liable for any purpose
or to any amount, except in the ordinary course of business and within
the scope of his authority as set forth in these By-Laws.
SECTION 2. Loans. Unless the Board shall otherwise
-----
determine, the President or any Vice-President may effect loans and
advances at any time for the Corporation from any bank, trust company
or other institution, or from any firm, corporation or individual, and
for such loans and advances may make, execute and deliver promissory
notes, bonds or other certificates or evidences of indebtedness of the
Corporation, but no officer or officers shall mortgage, pledge,
hypothecate or transfer any securities or other property of the
Corporation other than in connection with the purchase of chattels for
use in the Corporation's operations, except when authorized by the
Board.
SECTION 3. Checks, Drafts, etc. All checks, drafts, bills
-------------------
of exchange or other orders for the payment of money out of the funds
of the Corporation, and all notes or other evidence of indebtedness of
the Corporation, shall be signed in the name and
<PAGE>
on behalf of the Corporation by such persons and in such manner as
shall from time to time be authorized by the Board.
SECTION 4. Deposits. All funds of the Corporation not
--------
otherwise employed shall be deposited from time to time to the credit
of the Corporation in such banks, trust companies or other
depositaries as the Board may from time to time designate or as may be
designated by any officer or officers of the Corporation to whom such
power of designation may from time to time be delegated by the Board.
For the purpose of deposit and for the purpose of collection for the
account of the Corporation, checks, drafts and other orders for the
payment of money which are payable to the order of the Corporation may
be endorsed, assigned and delivered by any officer or agent of the
Corporation.
SECTION 5. General and Special Bank Accounts. The Board
---------------------------------
may from time to time authorize the opening and keeping of general
and special bank accounts with such banks, trust companies or other
depositaries as the Board may designate or as may be designated by any
officer or officers of the Corporation to whom such power of
designation may from time to time be delegated by the Board. The
Board may make such special rules and regulations with respect to such
bank accounts, not inconsistent with the provisions of these By-Laws,
as it may deem expedient.
<PAGE>
ARTICLE VII
Offices
--------
SECTION 1. Registered office. The registered office of the
-----------------
Corporation shall be as specified in the Certificate of Incorporation.
SECTION 2. Other Offices. The Corporation may also have
-------------
such offices, both within or without the State of Delaware, as the
Board of Directors may from time to time determine or the business of
the Corporation may require.
ARTICLE VIII
Fiscal Year
------------
The fiscal year of the Corporation shall be so determined by
the Board of Directors.
ARTICLE IX
Seal
-----
The seal of the Corporation shall be circular in form, shall
bear the name of the Corporation and shall include the words and
numbers "Corporate Seal", "Delaware" and the year of incorporation.
<PAGE>
ARTICLE X
Indemnification
----------------
Any person made a party to any action or proceeding (whether
or not by or in the right of the Corporation to procure a judgment in
its favor or by or in the right of any other corporation) by reason of
the fact that he, his testator or intestate, is or was a director,
officer or employee of the Corporation, or of any corporation which he
served as such at the request of the Corporation, shall be indemnified
by the Corporation against judgments, fines, amounts paid in
settlement and reasonable expenses, including attorneys' fees,
actually and necessarily incurred by him in connection with the
defense of or as a result of such action or proceeding, or in
connection with any appeal therein, to the full extent permitted under
the laws of the State of Delaware from time to time in effect. The
Corporation shall have the power to purchase and maintain insurance
for the indemnification of such directors, officers and employees to
the full extent permitted under the laws of the State of Delaware from
time to time in effect. Such right of indemnification shall not be
deemed exclusive of any other rights of indemnification to which such
director, officer or employee may be entitled.
<PAGE>
ARTICLE XI
Amendment
----------
The By-Laws may be amended, repealed or altered by vote of
the holders of a majority of the shares of stock at the time entitled
to vote in the election of directors, except as otherwise provided in
the Certificate of Incorporation. The By-Laws may also be amended,
repealed or altered by the Board of Directors, but any By-Law adopted
by the Board of Directors may be amended, repealed or altered by the
stockholders entitled to vote thereon as herein provided.
NYFS06...:\47\41847\0008\1710\EXHD156X.260
Exhibit 3.2(u)(i)
<PAGE>
BY-LAWS
OF
L.M.S. DEVELOPMENT CORPORATION
ARTICLE I
----------
Meetings of Shareholders
1. ANNUAL MEETINGS. A meeting of the shareholders shall
---------------
be held annually on the second Tuesday of the last month of the fiscal
year of the corporation for the purpose of electing directors and for
the transaction of any other business that may properly come before
it.
2. SPECIAL MEETINGS. Special meetings of the shareholders
----------------
for any purpose or purposes shall be held whenever called by the Board
of Directors, either by written instrument or by the vote of a
majority, and shall be called whenever shareholders owning one-tenth
(1/10) of the voting shares issued and outstanding shall in writing
make application therefor to the President, stating the object of such
meeting.
3. NOTICE. Notice of the meetings of the shareholders
------
shall be delivered personally or mailed by an officer of the
corporation to the last known address of each shareholder as the same
appears on the records of the corporation not less than ten nor more
than fifty days before the date of the meeting.
4. PLACE OF MEETING. Meetings of the shareholders shall
----------------
be held at the known place of business of the corporation or at such
other place as may be determined by the unanimous votes of the Board
of Directors of the corporation.
5. ORGANIZATION. The President, or in his absence, the
------------
Vice-President and, in the absence of both, a chairman appointed by
the shareholders present, shall call the meetings of shareholders to
order and shall act as chairman thereof. The Secretary of the
corporation shall act as Secretary at all meetings of the shareholders
or, in his absence, the presiding officer may appoint any person to
act as Secretary.
6. QUORUM. A majority of the shares issued and
------
outstanding represented by the holders thereof, either in person or by
proxy appointed by an instrument in writing, subscribed by
<PAGE>
such shareholders, shall be a quorum at all meetings of shareholders.
If a quorum is present, the affirmative vote of a majority of the
shares represented at the meeting shall be the act of the shareholders
unless the vote of a greater number of shares is required by law, the
Articles of Incorporation, or by specific provisions of these By-Laws.
7. ADJOURNMENT. If at any annual or special meeting a
-----------
quorum shall fail to attend in person or by proxy, a majority in
interest of the shareholders attending in person or by proxy at the
time of such meeting may, at the end of any hour, adjourn the meeting
from time to time without any further notice until a quorum shall
attend, and thereupon any business may be transacted which might have
been transacted at the meeting as originally called, had the same vote
been held.
8. VOTING. At all meetings of shareholders, every
------
shareholder, with in person or by proxy in writing, shall have one
vote for each share of stock so held and represented at such meeting.
Upon the demand of any shareholder, voting for directors and, upon
other question at any meeting of the shareholder, shall be by ballot.
In all elections for directors of the corporation, each shareholder
shall have the right to cast as many votes in the aggregate as he
shall be entitled to vote based upon the number of voting shares held
by such shareholder and multiplied by the number of directors to be
elected at such election; and each shareholder may cast the whole
number of votes, either in person or by proxy, for one candidate or
distribute such votes among two or more such candidates.
9. ACTION BY RESOLUTION. A resolution in writing, signed
--------------------
by all of the shareholders, shall be deemed to be the action of
shareholders to the effect therein duly expressed with the same force
and effect as if the same had been duly passed by the same vote at a
duly convened meeting, and it shall be the duty of the Secretary of
the corporation to record such resolution in the minute book of the
corporation under its proper date.
ARTICLE II
-----------
Board of Directors
1. NUMBER. The business and affairs of the corporation
------
shall be managed and controlled by a Board of Directors. The first
Board of Directors shall consist of the persons named in the Articles
of Incorporation. Thereafter,
<PAGE>
within the limits specified in the Articles of Incorporation, the
number of directors shall be changed only by the unanimous resolution
of the shareholders present at an annual meeting. The directors shall
be elected at the annual meeting of the shareholders and each director
shall hold office until his successor is elected and qualified.
2. ANNUAL MEETING. Immediately after the annual election
--------------
of directors, the newly elected directors shall meet for the purpose
of organization, the election of officers and for the transaction of
other business.
3. SPECIAL MEETINGS. Special meetings of the Board of
----------------
Directors shall be held whenever regularly called by the President or
by a majority of the members of the Board of Directors. Unless
otherwise specified in the notice thereof, any and all business may be
transacted at a special meeting.
4. PLACE OF MEETING. Meetings of the Board of Directors,
----------------
annual or special, may be held either within or without the State of
Arizona and may be held by means of conference, telephone or similar
communications equipment by means of which all persons participating
in the meeting can hear each other, and participation in a meeting
pursuant to this paragraph shall constitute presence in person at such
meeting.
5. NOTICE. The Secretary shall give notice to each
------
director of each special meeting by mailing the same at least five
days before the time of meeting or by telegraphing or telephoning not
less than two days before the time of meeting.
6. QUORUM. A majority of the Board of Directors at the
------
time in office shall constitute a quorum for the transaction of
business, but a majority of those present at the time and place of any
regular or special meeting, although less than a quorum, may adjourn
from time to time without notice until a quorum be had. The vote of a
majority of the directors present at any meeting in favor of or
against any proposition shall prevail except as herein otherwise
provided.
7. VACANCIES. In case of any vacancy among the directors
---------
through death, resignation, disqualification or other cause, the
remaining directors, by the affirmative vote of a majority thereof,
whether or not constituting a quorum, may elect a successor to hold
office for the unexpired portion of the term of the director whose
place shall be vacant and until the election and qualification of his
successor.
<PAGE>
8. COMMITTEES. From time to time, the Board may appoint
----------
committees for any purpose or purposes, which shall have such powers
as shall be specified in the resolution of appointment.
9. COMPENSATION. The directors and officers of the
------------
corporation and all members of committees shall serve without salary
except as may be determined by the vote of a majority of all of the
directors.
10. EXTENSIONS OF CREDIT. Loans or advances may be made by
--------------------
the corporation to employees, including employees who are on the Board
of Directors of the corporation, if made with the knowledge and
consent of the Board of Directors, which consent need not be in
writing at the time the loans or advances are made.
11. ACTION BY RESOLUTION. A resolution in writing, signed
--------------------
by all the members of the Board of Directors, shall be deemed to be
action by such Board of Directors to the effect therein expressed with
the same force and effect as if the same had been duly passed by the
same vote at a duly convened meeting, and it shall be the duty of the
Secretary of the corporation to record such resolution in the minute
book of the corporation under its proper date.
ARTICLE III
------------
Officers
1. EXECUTIVE. The officers of the corporation shall be a
---------
President, Vice President, Secretary and Treasurer, and such other
officers as the Board of Directors may elect. Any two or more offices
may be consolidated and held by one person.
2. TENURE OF OFFICE. All officers and agents shall be
----------------
subject to removal at any time, with or without cause, by the
affirmative vote of a majority of the whole Board of Directors.
3. PRESIDENT. The President shall be the chief executive
officer of the corporation. He shall preside at all meetings of the
shareholders and of the Board of Directors, unless a chairman of the
Board of Directors has been elected and is present. He shall sign and
execute all authorized bonds, contracts or other obligations in the
name of the corporation; shall have the power to vote, for and on
behalf of the corporation, any shares which the corporation owns in
another
<PAGE>
corporation; and, with the Secretary, shall sign all certificates of
shares of the corporation, and shall do and perform such other duties
as from time to time may be assigned to him by the Board of Directors.
4. VICE-PRESIDENT. In case of the absence or disability
--------------
of the President, the duties of that office shall be performed by the
Vice-President, except as may be limited by a vote of the Board of
Directors.
5. TREASURER. The Treasurer shall have custody of all the
---------
securities of the corporation. He shall supervise the collection and
deposit of amounts due to the corporation. He shall also supervise
the disbursement of funds by the corporation and the maintenance of
full and accurate accounting records for the corporation.
6. SECRETARY. The Secretary shall keep the minutes of all
---------
proceedings of the Board of Directors and the minutes of all meetings
of the shareholders; he shall attend the giving and serving of all
notices for the corporation and, when directed by either the President
or Vice-President, shall execute in the name of the corporation all
contracts authorized by the Board of Directors and shall affix the
seal of the corporation thereto; he shall have charge of the
certificate books and such other books and papers as the Board of
Directors may direct; he shall sign with the President or Vice-
President certificates of shares; and he shall, in general, perform
all the duties incident to the office of the Secretary, subject to the
control of the Board of Directors.
ARTICLE IV
-----------
Capital Shares
1. CERTIFICATES. The certificates for shares of the
------------
corporation shall be in such form as shall be approved by the Board of
Directors. The certificates shall be signed by the President and the
Secretary.
2. RECORDS. All certificates shall be consecutively
-------
numbered and the names of the owners, the number of shares and the
date of issue shall be entered in the corporation's books.
3. LOST CERTIFICATES. The Board of Directors may direct a
-----------------
new certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the
<PAGE>
corporation alleged to have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the person claiming the
certificate to be lost, stolen or destroyed. When authorizing such
issue of a new certificate or certificates, the Board of Directors
may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed
certificate or certificates, or his legal representative, to advertise
the same in such manner as it shall require and/or to give the
corporation a bond in such sum as it may direct as indemnity against
any claim that may be made against the corporation with respect to the
certificate alleged to have been lost, stolen or destroyed.
4. CERTIFICATES CANCELLED. Except in the case of lost or
----------------------
destroyed certificates and, in that case, after compliance with the
provisions of these By-Laws relating to lost certificates, no new
certificate shall be issued until the former certificate for the
shares represented thereby shall have been surrendered and cancelled.
5. TRANSFER. Shares shall be transferred only upon the
--------
books of the corporation by the holder thereof, in person or by his
attorneys, upon the surrender and cancellation of certificates for a
like number of shares.
6. RECORD DATE. In order to determine the shareholders
-----------
entitled to notice of or to vote at any meeting of the shareholders or
any adjournment thereof, or to express consent to corporate action in
writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled
to exercise any rights in respect of any change, conversion or
exchange of shares or for the purpose of any other lawful action, the
Board of Directors may fix, in advance, a record date, which shall not
be more than thirty nor less than ten days before the date of such
meeting, nor more than sixty days prior to any other action. A
determination of shareholders of record entitled to notice of or to
vote at a meeting of shareholders shall apply to any adjournment of
the meeting; provided, however, that the Board of Directors may fix a
new record date for the adjourned meeting, and further provided that
the adjournment or adjournments do not exceed thirty days in the
aggregate.
7. REGISTERED SHAREHOLDERS. The corporation shall be
-----------------------
entitled to recognize the exclusive right of a person registered on
its books as the owner of shares to receive dividends, and to vote as
such owner, and to hold liable for calls and assessments a person
registered on its books as the owner of shares, and
<PAGE>
shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person,
whether or not it shall have express or other notice thereof.
8. REGULATIONS. The Board of Directors may make such
-----------
rules and regulations as it may deem expedient concerning the issue,
transfer and registration of certificates of shares of the
corporation.
ARTICLE V
----------
Dividends
1. DIVIDENDS. The Board of Directors, in its discretion,
---------
from time to time, may declare dividends upon the capital shares from
the surplus or net profits of the corporation and may fix the dates
for the declaration and payment of dividends.
ARTICLE VI
-----------
Seal
1. DESIGN. The corporate seal shall have inscribed
------
thereon the name of the corporation. Said seal may be used by causing
it or a facsimile thereof to be impressed or affixed or in any manner
reproduced, which seal shall be in charge of the Secretary to be used
as directed by the Board of Directors.
ARTICLE VII
------------
Waiver of Notice
1. WAIVER. Any shareholder or director may waive any
------
notice required to be given under the provisions of the statutes or
provisions of the Articles of Incorporation or these By-Laws by
delivering a waiver thereof, in writing, to the Secretary of the
corporation. Attendance of a director at a meeting shall constitute a
waiver of notice of such meeting, except where a director attends a
meeting for the express purpose of objecting to the transaction of any
business because the meeting was not lawfully called or convened.
Neither the business to be trans- acted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified
in the waiver of notice.
<PAGE>
ARTICLE VIII
-------------
Amendment
1. AMENDMENT. These By-Laws may be altered, amended or
---------
repealed, or new By-Laws may be adopted, by the shareholders or by the
Board of Directors at any meeting, provided that notice of the
proposed change is contained in the notice of such meeting; provided,
however, that the provisions of these By-Laws relating to the number
of persons serving on the Board of Directors shall not be changed
without the unanimous vote of the shareholders present at a duly
called meeting of the shareholders.
NYFS06...:\47\41847\0008\1710\TABD136M.220
Exhibit 3.2(v)(i)
<PAGE>
BY-LAWS
OF
MONETARY MANAGEMENT CORP.
(a Pennsylvania Corporation)
ARTICLE I
---------
OFFICES AND FISCAL YEAR
Section 1.01. REGISTERED OFFICE. The registered
-----------------
office of the corporation in Pennsylvania shall be c/o Brian J.
Sisko, Esquire, 1401 Walnut Street, Philadelphia, Pennsylvania
19102 until otherwise established by an amendment of the Articles
or by the Board of Directors and a record of such change is filed
with the Department of State in the manner provided by law.
Section 1.02. OTHER OFFICE. The corporation may also
------------
have offices at such other places within or without Pennsylvania
as the Board of Directors may from time to time appoint or the
business or the corporation may require.
Section 1.03. FISCAL YEAR. The fiscal year of the
------------
corporation shall begin the 1st day of January in each year.
<PAGE>
ARTICLE II
---------
NOTICE - WAIVERS - MEETINGS GENERALLY
Section 2.01. MANNER OF GIVING NOTICE.
-----------------------
(a) General Rule. Whenever written notice is
------------
required to be given to any person under the provisions of the
Business Corporation Law or by the Articles or these By-Laws, it
may be given to the person either personally or by sending a copy
thereof by first class or express mail, postage prepaid, or by
telegram (with messenger service specified), telex or TWX (with
answerback received) or courier service, charges prepaid, or by
telecopier, to the address (or to the telex, TWX, telecopier or
telephone number) of the person appearing on the books of the
corporation or, in the case of directors, supplied by the
directors to the corporation for the purpose of notice. If the
notice is sent by mail, telegraph or courier service, it shall be
deemed to have been given to the person entitled thereto when
deposited in the United States mail or with a telegraph office or
courier service for delivery to that person or in the case of
telex or TWX, when dispatched or, in the case of telecopier, when
received. A notice of meeting shall specify the place, day and
hour of the meeting and any other orientation required by any
other provision of the Business Corporation Law, the Articles or
these By-Laws.
<PAGE>
(b) Adjourned Shareholder Meetings. When a
------------------------------
meeting of shareholders is adjourned, it shall not be necessary
to give any notice of the adjourned meeting or of the business to
be transacted at an adjourned meeting, other than by announcement
at the meeting at which the adjournment is taken, unless the
board fixes a new record date for the adjourned meeting.
Section 2.02. NOTICE OF MEETINGS OF BOARD OF
------------------------------
DIRECTORS. Notice of a regular meeting of the Board of Directors
---------
need not be given. Notice of every special meeting of the Board
of Directors shall be given to each director by telephone or in
writing at least twenty-four (24) hours (in the case of notice by
telephone, telex, TWX or telecopier) or forty-eight (48) hours
(in the case of notice by telegraph, courier service or express
mail) or five (5) days (in the case of notice by first class
mail) before the time at which the meeting is to be held. Every
such notice shall state the time and place of the meeting.
Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the board need be specified in a
notice of a meeting.
Section 2.03. NOTICE OF MEETINGS OF SHAREHOLDERS.
----------------------------------
(a) General Rule. Written notice of every
------------
meeting of the shareholders shall be given by, or at the
direction of, the Secretary to each shareholder of record
entitled to vote at the meeting at least:
<PAGE>
(1) Ten (10) days prior to the day named for
a meeting called to consider a fundamental transaction under
15 Pa.C.S. Chapter 19 regarding amendments of Articles of
incorporation, mergers, consolidations, share exchanges,
sale of assets, divisions, conversions, liquidations and
dissolution; or
(2) five (5) days prior to the day named for
the meeting in any other case.
If the Secretary neglects or refuses to give notice of a meeting,
the person or persons calling the meeting may do so. In the case
of a special meeting of shareholders, the notice shall specify
the general nature of the business to be transacted.
(b) Notice of Action by Shareholders on By-Laws.
-------------------------------------------
In the case of a meeting of shareholders that has as one of its
purposes action on the By-Laws, written notice shall be given to
each shareholder that the purpose, or one of the purposes, of the
meeting is to consider the adoption, amendment or repeal of the
By-Laws. There shall be included in, or enclosed with, the
notice a copy of the proposed amendment or a summary of the
changes to be effected thereby.
Section 2.04. WAIVER OF NOTICE.
----------------
(a) Written Waiver. Whenever any written notice
--------------
is required to be given under the provisions of the Business
Corporation Law, the Articles or these By-Laws, a waiver thereof
<PAGE>
in writing, signed by the person or persons entitled to the
notice, whether before or after the time stated therein, shall be
deemed equivalent to the giving of the notice. Except as
otherwise required by this subsection, neither the business to be
transacted at, nor the purpose of, a meeting need be specified in
the waiver of notice of the meeting. In the case of a special
meeting of shareholders, the waiver of notice shall specify the
general nature of the business to be transacted.
(b) Waiver by Attendance. Attendance of a person
--------------------
at any meeting shall constitute a waiver of notice of the meeting
except where a person attends a meeting for the express purpose
of objecting, at the beginning of the meeting, to the transaction
of any business because the meeting was not lawfully called or
convened.
Section 2.05. MODIFICATION OF PROPOSAL CONTAINED IN
-------------------------------------
NOTICE. Whenever the language of a proposed resolution is
------
included in a written notice of a meeting required to be given
under the provisions of the Business Corporation Law or the
Articles or these By-Laws, the meeting considering the resolution
may without further notice adopt it with such clarifying or other
amendments as do not enlarge its original purpose.
Section 2.06. EXCEPTION TO REQUIREMENT OF NOTICE.
----------------------------------
(a) General Rule. Whenever any notice or
------------
communication is required to be given to any person under the
<PAGE>
provisions of the Business Corporation Law or by the Articles or
these By-Laws or by the terms of any agreement or other
instrument or as a condition precedent to taking any corporate
action and communication with that person is then unlawful, the
giving of the notice or communication to that person shall not be
required.
(b) Shareholders Without Forwarding Addresses.
-----------------------------------------
Notice or other communications shall not be sent to any
shareholder with whom the corporation has been unable to
communicate for more than twenty-four (24) consecutive months
because communications to the shareholder are returned unclaimed
or the shareholder has otherwise failed to provide the
corporation with a current address. Whenever the shareholder
provides the corporation with a current address, the corporation
shall commence sending notices and other communications to the
shareholder in the same manner as to other shareholders.
Section 2.07. USE OF CONFERENCE TELEPHONE AND SIMILAR
---------------------------------------
EQUIPMENT. One or more persons may participate in a meeting of
---------
the Board of Directors or the shareholders of the corporation by
means of conference telephone or similar communications equipment
by means of which all persons participating in the meeting can
hear each other. Participation in a meeting pursuant to this
section shall constitute presence in person at the meeting.
<PAGE>
ARTICLE III
---------
SHAREHOLDERS
Section 3.01. PLACE OF MEETING. All meetings of
----------------
the shareholders of the corporation shall be held at the
registered office of the corporation unless another place is
designated by the Board of Directors in the notice of a meeting.
Section 3.02. ANNUAL MEETING. The Board of Directors
--------------
may fix the date and time of the annual meeting of the
shareholders, but if no such date and time is fixed by the board,
the meeting for any calendar year shall be held on the first day
of April in such year, if not a legal holiday under the laws of
Pennsylvania, and, if a legal holiday, then on the next
succeeding business day, if not a Saturday, at 10 o'clock A.M.,
and at said meeting the shareholders then entitled to vote shall
elect directors and shall transact such other business as may
properly be brought before the meeting. If the annual meeting
shall not have been called and held within six (6) months after
the designated time, any shareholder may call the meeting at any
time thereafter.
Section 3.03. SPECIAL MEETINGS.
----------------
(a) Call of Special Meetings. Special meetings
------------------------
of the shareholders may be called at any time:
(1) by the Board of Directors; or
<PAGE>
(2) unless otherwise provided in the
Articles, by shareholders entitled to cast at least twenty
(20%) percent of the vote that all shareholders are entitled
to cast at the particular meeting.
(b) Fixing of Time for Meeting. At any time,
--------------------------
upon written request of any person who has called a special
meeting, it shall be the duty of the Secretary to fix the time of
the meeting which shall be held not more than sixty (60) days
after the receipt of the request. If the Secretary neglects or
refuses to fix a time of the meeting, the person or persons
calling the meeting may do so.
Section 3.04. QUORUM AND ADJOURNMENT.
----------------------
(a) General Rule. A meeting of shareholders of
------------
the corporation duly called shall not be organized for the
transaction of business unless a quorum is present. The presence
of shareholders entitled to cast at least a majority of the votes
that the shareholders are entitled to cast on a particular matter
to be acted upon at the meeting shall constitute a quorum for the
purposes of consideration and action on the matter. Shares of
the corporation owned, directly or indirectly, by it and
controlled, directly or indirectly, by the Board of Directors of
this corporation, as such, shall not be counted in determining
the total number of outstanding shares for quorum purposes at any
given time.
<PAGE>
(b) Withdrawal of a Quorum. The shareholders
----------------------
present at a duly organized meeting can continue to do business
until adjournment notwithstanding the withdrawal of enough
shareholders to leave less than a quorum.
(c) Adjournment for Lack of Quorum. If a meeting
------------------------------
cannot be organized because a quorum has not attended, those
present may, except as provided in the Business Corporation Law,
adjourn the meeting to such time and place as they may determine.
(d) Adjournments Generally. Any meeting at
----------------------
which directors are to be elected shall be adjourned only from
day to day, or for such longer periods not exceeding fifteen (15)
days each as the shareholders present and entitled to vote shall
direct, until the directors have been elected. Any other regular
or special meeting may adjourned for such period as the
shareholders present and entitled to vote shall direct.
(e) Electing Directors at Adjourned Meeting.
---------------------------------------
Those shareholders entitled to vote who attend a meeting called
for the election of directors that had been previously adjourned
for lack of a quorum, although less than a quorum as fixed in
this section, shall nevertheless constitute a quorum for the
purpose of electing directors.
(f) Other Action in Absence of Quorum. Those
---------------------------------
shareholders entitled to vote who attend a meeting of
shareholders that has been previously adjourned for one or more
<PAGE>
periods aggregating at least fifteen (15) days because of an
absence of a quorum, although less than a quorum as fixed in this
section, shall nevertheless constitute a quorum for the purpose
of acting upon any matter set forth in the notice of the meeting
if the notice states that those shareholders who attend the
adjourned meeting shall nevertheless constitute a quorum for the
purpose of acting upon the matter.
Section 3.05. ACTION BY SHAREHOLDERS.
----------------------
(a) General Rule. Except as otherwise provided
------------
in the Business Corporation Law or the Articles or these By-Laws,
whenever any corporate action is to be taken by vote of the
shareholders of the corporation, it shall be authorized by a
majority of the votes cast at a duly organized meeting of
shareholders by the holders of shares entitled to vote thereon.
(b) Interested Shareholders. Any merger or
-----------------------
other transaction authorized under 15 Pa.C.S. Subchapter 19C
between the corporation or subsidiary thereof and a shareholder
of this corporation, or any voluntary liquidation authorized
under 15 pa.C.S. Subchapter 19F in which a shareholder is treated
differently from other shareholders of the same class (other than
any dissenting shareholders), shall require the affirmative vote
of the shareholders entitled to cast at least a majority of the
votes that all shareholders other than the interested shareholder
are entitled to cast with respect to the transaction, without
<PAGE>
counting the vote of the interested shareholder. For the
purposes of the preceding sentence, an interested shareholder
shall include the shareholder who is a party to the transaction
or who is treated differently from other shareholders and any
person, or group of persons, that is acting jointly or in concert
with the interested shareholder and any person who, directly or
indirectly, controls, is controlled by or is under common control
with the interested shareholder. An interested shareholder
shall not include any person who, in good faith and not for the
purpose of circumventing this subsection, is an agent, bank,
broker, nominee or trustee for one or more other persons, to the
extent that the other person or persons are not interested
shareholders.
(c) Exceptions. Subsection (b) shall not apply
----------
to a transaction:
(1) that has been approved by a majority
vote of the Board of Directors without counting the vote of
directors who:
(i) are directors or officers of, or
have a material equity interest in, the interested
shareholder; or
(ii) were nominated for election as a
director by the interested shareholder, and first
<PAGE>
elected as a director, within twenty-four (24) months
of the date of the vote on the proposed transaction; or
(2) in which the consideration to be
received by the shareholders for shares of any class of
which shares are owned by the interested shareholder is not
less than the highest amount paid by the interested
shareholder in acquiring shares of the same class.
(d) Additional Approvals. The approvals required
--------------------
by subsection (b) shall be in addition to, and not in lieu of,
any other approval required by the Business Corporation Law, the
Articles or these By-Laws, or otherwise.
Section 3.06. ORGANIZATION. At every meeting of the
------------
shareholders, the Chairman of the Board, if there be one, or, in
the case of vacancy in office or absence of the Chairman of the
Board, one of the following officers present in the order stated:
the Vice Chairman of the Board, if there be one, the president,
the Vice Presidents in their order of rank and seniority, or a
person chosen by vote of the shareholders present, shall act as
Chairman of the meeting. The Secretary or, in the absence of the
Secretary, an Assistant Secretary, or in the absence of both the
Secretary and Assistant Secretaries, a person appointed by the
Chairman of the meeting, shall act as Secretary.
Section 3.07. VOTING RIGHTS OF SHAREHOLDERS.
-----------------------------
Unless otherwise provided in the Articles, every shareholder of
<PAGE>
the corporation shall be entitled to one vote for every share
standing in the name of the shareholder on the books of the
corporation.
Section 3.08. VOTING AND OTHER ACTION BY PROXY.
--------------------------------
(a) General Rule.
------------
(1) Every shareholder entitled to vote at a
meeting of shareholders or to express consent or dissent to
corporate action in writing without a meeting may authorize
another person to act for the shareholder by proxy.
(2) The presence of, or vote or other action
at a meeting of shareholders, or the expression of consent
or dissent to corporate action in writing, by a proxy of a
shareholder shall constitute the presence of, or vote or
action by, or written consent or dissent of the shareholder.
(3) Where two or more proxies of a
shareholder are present, the corporation shall, unless
otherwise expressly provided in the proxy, accept as the
vote of all shares represented thereby the vote cast by a
majority of them and, if a majority of the proxies cannot
agree whether the shares represented shall be voted or upon
the manner of voting the shares, the voting of the shares
shall be divided equally among those persons.
<PAGE>
(b) Minimum Requirements. Every proxy shall be
--------------------
executed writing by the shareholder or by the duly authorized
attorney- -act of the shareholder and filed with the Secretary of
the corporation. A proxy, unless coupled with an interest, shall
be revocable at will, notwithstanding any other agreement or any
provision in the proxy to the contrary, but the revocation of a
proxy shall not be effective until written notice thereof has
been given to the Secretary of the corporation. An unrevoked
proxy snail not be valid after three (3) years from the date of
its - execution unless a longer time is expressly provided
therein. A proxy shall not be revoked by the death or incapacity
of the maker unless, before the vote is counted or the authority
is exercised, written notice of the death or incapacity is given
to the Secretary of the corporation.
(c) Expenses. Unless otherwise restricted in
--------
the Articles, the corporation shall pay the reasonable expenses
of solicitation of votes, proxies or consents of shareholders by
or on behalf of the Board of Directors or its nominees for
election to the board, including solicitation by professional
proxy solicitors and otherwise.
Section 3.09. VOTING BY FIDUCIARIES AND PLEDGEES.
----------------------------------
Shares of the corporation standing in the name of a trustee or
other fiduciary and shares held by an assignee for the benefit of
creditors or by a receiver may be voted by the trustee,
<PAGE>
fiduciary, assignee or receiver. A shareholder whose shares are
pledged shall be entitled to vote the shares until the shares
have been transferred into the name of the pledgee, or a nominee
of the pledgee, but nothing in this section shall affect the
validity of proxy given to a pledgee or nominee.
Section 3.10. VOTING BY JOINT HOLDERS OF SHARES.
---------------------------------
(a) General Rule. Where shares of the
------------
corporation are held jointly or as tenants in common by two or
more persons, as fiduciaries or otherwise:
(1) if only one or more of such persons is
present in person or by proxy, all of the shares standing in
the names of such persons shall be deemed to be represented
for the purpose of determining a quorum and the corporation
shall accept as the vote of all the shares the vote cast by
a joint owner or a majority of them; and
(2) if the persons are equally divided upon
whether the shares held by them shall be voted or upon the
manner of voting the shares, the voting of the shares shall
be divided equally among the persons without prejudice to
the rights of the joint owners or the beneficial owners
thereof among themselves.
(b) Exception. If there has been filed with the
---------
Secretary of the corporation a copy, certified by an attorney at
law to be correct, of the relevant portions of the agreement
<PAGE>
under which the shares are held or the instrument by which the
trust or estate was created or the order of court appointing them
or of an order of court directing the voting of the shares, the
persons specified as having such voting power in the document
latest in date of operative effect so filed, and only those
persons, shall be entitled to vote the shares but only in
accordance therewith.
Section 3.11. VOTING BY CORPORATIONS.
----------------------
(a) Voting by Corporate Shareholders. Any
--------------------------------
corporation that is a shareholder of this corporation may vote by
any of its officers or agents, or by proxy appointed by any
officer or agent, unless some other person, by resolution of the
Board of Directors of the other corporation or provision of its
Articles or By-Laws, a copy of which resolution or provision
certified to be correct by one of its officers has been filed
with the Secretary of this corporation, is appointed its general
or special proxy in which case that person shall be entitled to
vote the shares.
(b) Controlled Shares. Shares of this
-----------------
corporation owned, directly or indirectly, by it and controlled,
directly or indirectly, by the Board of Directors of this
corporation, as such, shall not be voted at any meeting and shall
not be counted in determining the total number of outstanding
shares for voting purposes at any given time.
<PAGE>
Section 3.12. DETERMINATION OF SHAREHOLDERS OF RECORD.
---------------------------------------
(a) Fixing Record Date. The Board of Directors
------------------
may fix a time prior to the date of any meeting of shareholders
as a record date for the determination of the shareholders
entitled to notice of, or to vote at, the meeting, which time,
except in the case of an adjourned meeting, shall be not more
than ninety (90) days prior to the date of the meeting of
shareholders. Only shareholders of record on the date fixed
shall be so entitled notwithstanding any transfer of shares on
the books of the corporation after any record date fixed as
provided in this subsection. The Board of Directors may
similarly fix a record date for the determination of shareholders
of record for any other purpose. When a determination of
shareholders of record has been made as provided in this section
for purposes of a meeting, the determination shall apply to any
adjournment thereof unless the board fixes a new record date for
the adjourned meeting.
(b) Determination When A Record Date Is Not
---------------------------------------
Fixed. If a record date is not fixed:
-----
(1) The record date for determining
shareholders entitled to notice of or to vote at a meeting
of shareholders shall be at the close of business on the
date next preceding the day on which notice is given or, if
<PAGE>
notice is waived, at the close of business on the day
immediately preceding the day on which the meeting is held.
(2) The record date for determining
shareholders entitled to express consent or dissent to
corporate action in writing without a meeting, when prior
action by the Board of Directors is not necessary, shall be
the close of business on the day on which the first written
consent or dissent is filed with the Secretary of the
corporation
(3) The record date for determining
shareholders for any other purpose shall be at the close of
business on the day on which the Board of Directors adopts
the resolution relating thereto.
Section 3.13. VOTING LISTS.
------------
(a) General Rule. The officer or agent having
------------
charge of the transfer books for shares of the corporation shall
make a complete list of the shareholders entitled to vote at any
meeting of shareholders, arranged in alphabetical order, with the
address of and of the number shares held by each. The list shall
be produced and kept open at the time and place of the meeting
and shall be subject to the inspection of any shareholder during
the whole time of the meeting for the purposes thereof.
(b) Effect of List. Failure to comply with the
--------------
requirements of this section shall not effect the validity of any
<PAGE>
action taken at a meeting prior to a demand at the meeting by any
shareholder entitled to vote thereat to examine the list. The
original share register or transfer book, or a duplicate thereof
kept in this Commonwealth, shall be prima facie evidence as to
who are the shareholders entitled to examine the list or share
register or transfer book or to vote at any meeting of
shareholders.
Section 3.14. JUDGES OF ELECTION.
------------------
(a) Appointment. In advance of any meeting of
-----------
shareholders of the corporation, the Board of Directors may
appoint judges of election, who need not be shareholders, to act
at the meeting or any adjournment thereof. If judges of election
are not so appointed, the presiding officer of the meeting may,
and on the request of any shareholder shall, appoint judges of
election at the meeting. The number of judges shall be one or
three. A person who is a candidate for office to be filled at
the meeting shall not act as a fudge.
(b) Vacancies. In case any person appointed as a
---------
judge fails to appear or fails or refuses to act, the vacancy may
be filed by appointment made by the Board of Directors in advance
of one convening of the meeting or at the meeting by the
presiding officer thereof.
(c) Duties. The judges of election shall
------
determine the number of shares outstanding and the voting power
<PAGE>
of each, the shares represented at the meeting, the existence of
a quorum, the authenticity, validity and effect of proxies,
receive votes or ballots, hear and determine all challenges and
questions in any way arising in connection with the right to
vote, count and tabulate all votes, determine the result and do
such acts as may be proper to conduct the election or vote with
fairness to all shareholders. The judges of election shall
perform their duties impartially, in good faith, to the best of
their ability and as expeditiously as is practical. If there are
three judges of election, the decision, act or certificate of a
majority shall be effective in all respects as the decision, act
or certificate of a majority shall be effective in all respects
as the decision, act or certificate of all.
(d) Report. On request of the presiding officer
------
of the meeting, or of any shareholder, the judge shall make a
report in writing of any challenge or question or matter
determined by them, and execute a certificate of any fact found
by them. Any report or certificate made by them shall be prima
facie evidence of the facts stated therein.
Section 3.15. CONSENT OF SHAREHOLDERS IN LIEU OF
----------------------------------
MEETING.
-------
(a) Unanimous Written Consent. Any action
-------------------------
required or permitted to be taken at a meeting of the
shareholders or of a class of shareholders may be taken without a
<PAGE>
meeting if, prior or subsequent to the action, a consent or
consents thereto by all of the shareholders who would be entitled
to vote at a meeting for such purpose shall be filed with the
Secretary of the corporation.
(b) Partial Written Consent. Any action required
-----------------------
or permitted to be taken at a meeting of the shareholders or of a
class of shareholders may be taken without a meeting upon the
written consent of shareholders who would have been entitled to
cast the minimum number of votes that would be necessary to
authorize the action at a meeting at which all shareholders
entitled to vote thereon were present and voting. The consents
shall be filed with the Secretary of the corporation. The action
shall not become effective until after at least ten (10) days'
written notice of the action has been given to each shareholder
entitled to vote thereon who has not consented thereto.
Section 3.16. MINORS AS SECURITY HOLDERS. The
--------------------------
corporation may treat a minor who holds shares or obligations of
the corporation as having capacity to receive and to empower
others to receive dividends, interest, principal and other
payments or distributions, to vote or express consent or dissent
and to make elections and exercise rights relating to such shares
or obligations unless, in the case of payments or distributions
on shares, the corporate officer responsible for maintaining the
list shareholders or the transfer agent of the corporation or, in
<PAGE>
the case of payments or distributions on obligations, the
Treasurer or paying officer or agent has received written notice
that the holder is a minor.
ARTICLE IV
---------
BOARD OF DIRECTORS
Section 4.01. POWERS: PERSONAL LIABILITY.
--------------------------
(a) General Rule. Unless otherwise provided by
------------
statute all powers vested by law in the corporation shall be
exercised by or under the authority of, and the business and
affairs of the corporation shall be managed under the direction
of, the Board of Directors.
(b) Standard of Care: Justifiable Reliance. A
--------------------------------------
director shall stand in a fiduciary relation to the corporation
and shall perform his or her duties as a director, including
duties as a member of any committee of the board upon which the
director may serve, in good faith, in a manner the director
reasonably believes to be in the best interests of the
corporation and with such care, including reasonable inquiry,
skill and diligence, as a person of ordinary prudence would use
under similar circumstances. In performing his or her duties, a
<PAGE>
director shall be entitled to rely in good faith on information,
opinions, reports or statements, including financial statements
and other financial data, in each case prepared or presented by
any of the following:
(1) One or more officers or employees of the
corporation whom the director reasonably believes to be
reliable and competent in the matters presented.
(2) Counsel, public accountants or other
persons as to matters which the director reasonably believes
to be within the professional or expert competence of such
person.
(3) A committee of the board upon which the
director does not serve, duly designated in accordance with
law, as to matters within its designated authority, which
committee the director reasonably believes to merit
confidence.
A director shall not be considered to be acting in good faith if
the director has knowledge concerning the matter in question that
would cause his or her reliance to be unwarranted.
(c) Consideration of Factors. In discharging the
------------------------
duties of their respective positions, the Board of Directors,
committees of the board and individual directors may, in
considering the best interest of the corporation, consider the
effects of any action employees, upon suppliers and customers of
<PAGE>
the corporation and corporation are located, and all other
pertinent factors. The consideration of those factors shall not
constitute a violation of subsection (b). If more than one class
are to be elected, each class of directors shall be elected in a
separate election.
(d) Presumption. Absent breach of fiduciary
-----------
duty, lack of good faith or self-dealing, actions taken as a
director or any failure to take any action shall be presumed to
be in the best interests of the corporation.
(e) Personal liability of directors.
-------------------------------
(1) A director shall not be personally
liable, as such, for monetary damages for any action taken,
or any failure to take any action, unless:
(i) the director has breached or
failed to perform the duties of his or her office under
this section; and
(ii) the breach or failure to
perform constitutes self-dealing, willful misconduct or
recklessness.
(2) The provisions of paragraph (1)
shall not apply to the responsibility or liability of a
director pursuant to any criminal statute, or the liability
of a director for the payment of taxes pursuant to local,
State or Federal law.
<PAGE>
(f) Notation of dissent. A director who is
-------------------
present at a meeting of the board of directors, or of a committee
of the board, at which action on any corporate matter is taken
shall be presumed to have assented to the action taken unless his
or her dissent is entered in the minutes of the meeting or unless
the director files a written dissent to the action with the
secretary of the meeting before the adjournment thereof or
transmits the dissent in writing to the secretary of the
corporation immediately after the adjournment of the meeting.
The right to dissent shall not apply to a director who voted in
favor of the action. Nothing in this section shall bar a
director from asserting that minutes of the meeting incorrectly
omitted his or her dissent if, promptly upon receipt of a copy of
such minutes, the director notifies the secretary in writing, of
the asserted omission or inaccuracy.
Section 4.02. QUALIFICATION AND SELECTION OF
------------------------------
DIRECTORS.
---------
(a) Qualifications. Each director of the
--------------
corporation shall be a natural person of full age who need not be
a resident of Pennsylvania or a shareholder of the corporation.
(b) Election of directors. Except as otherwise
---------------------
provided in these bylaws, directors of the corporation shall be
elected by the shareholders. In elections for directors, voting
need not be by ballot, except upon demand made by a shareholder
<PAGE>
entitled to vote at the election and before the voting begins.
The candidates receiving the highest number of votes from each
class or group of classes, if any, entitled to elect directors
separately up to the number of directors to be elected by the
class or group of classes shall be elected. If at any meeting of
shareholders, directors of more than one class are to be elected,
each class of directors shall be elected in a separate election.
(c) Cumulative voting. Unless the articles
-----------------
provide for straight voting, in each election of directors every
shareholder entitled to vote shall have the right to multiply the
number of votes to which the shareholder may be entitled by the
total number of directors to be elected in the same election by
the holders of the class or classes of shares of which his or her
shares are a part and the shareholders may case the whole number
of his or her votes for one candidate or may distribute them
among two or more candidates.
Section 4.03. NUMBER AND TERM OF OFFICE.
-------------------------
(a) Number. The Board of Directors shall consist
------
of such number of directors, not less than 1 nor more than 6, as
may be determined from time to time by resolution of the Board of
Directors.
(b) Term of Office. Each director shall hold
--------------
office until the expiration of the term for which he or she was
elected and until a successor has been selected and qualified or
<PAGE>
until his or her earlier death, resignation or removal. A
decrease in the number of directors shall not have the effect of
shortening the term of any incumbent director.
(c) Resignation. Any director may resign at any
-----------
time upon written notice to the corporation. The resignation
shall be effective upon receipt thereof by the corporation or at
such subsequent time as shall be specified in the notice of
resignation.
Section 4.04. VACANCIES.
---------
(a) General Rule. Vacancies in the Board of
------------
Directors, including vacancies resulting from an increase in the
number of directors, may be filled by a majority vote of the
remaining members of the board though less than a quorum, or by a
sole remaining director, and each person so selected shall be a
director serve for the balance of the unexpired term, and until a
successor has been selected and qualified or until his or her
earlier death, resignation or removal.
(b) Action by Resigned Directors. When one or
----------------------------
more Directors resign from the board effective at a future date,
the Directors then in office, including those who have so
resigned, shall have power by the applicable vote to fill the
vacancies, the vote thereon to take effect when the resignations
become effective.
Section 4.05. REMOVAL OF DIRECTORS.
--------------------
<PAGE>
(a) Removal by the Shareholders. The entire
---------------------------
Board of directors, or any class of the board, or any individual
director may be removed from office without assigning any cause
by the vote shareholders, or of the holders of a class or series
of shares, entitled to elect directors, or the class of
directors. In case the board or a class of the board or any one
or more directors are removed, new directors may be elected at
the same meeting. The Board of Directors may be removed at any
time with or without cause by the unanimous vote or consent of
shareholders entitled to vote thereon.
(b) Removal by the Board. The Board of Directors
--------------------
may declare vacant the office of a director who has been
judicially declared of unsound mind or who has been convicted of
an offense punishable by imprisonment for a term of more than one
year or if, within sixty (60) days after notice of his or her
selection, the director does not accept the office either in
writing or by attending a meeting of the Board of Directors.
(c) Removal of Directors Elected by Cumulative
------------------------------------------
Voting. An individual director shall not be removed (unless the
------
entire board or class of the board is removed) if sufficient
votes are cast against the resolution for his removal which, if
cumulatively voted at an annual or other regular election of
directors, would be sufficient to elect one or more directors to
the board or to the class.
<PAGE>
Section 4.06. PLACE OF MEETINGS. Meetings of the
-----------------
Board of Directors may be held at such place within or without
Pennsylvania as the Board of Directors may from time to time
appoint or as may be designated in the notice of the meeting.
Section 4.07. ORGANIZATION OF MEETINGS. At every
------------------------
meeting of the Board of Directors, the Chairman of the Board, if
there be one, or, in the case of a vacancy in the office or
absence of the chairman of the board, one of the following
officers present in the order stated: the Vice Chairman of the
Board, if there be one, the President, the Vice Presidents in
their order of rank and seniority, or a person chosen by a
majority of the directors present, shall act as Chairman of the
meeting. The Secretary or, in the absence of the Secretary, an
Assistant Secretary, or, in the absence of the Secretary and the
Assistant Secretaries, any person appointed by the Chairman of
the meeting, shall act as Secretary.
Section 4.08. REGULAR MEETINGS. Regular meetings of
----------------
the Board of Directors shall be held at such time and place as
shall be designated from time to time by resolution of the Board
of Directors.
Section 4.09. SPECIAL MEETINGS. Special meetings of
----------------
the Board of Directors shall be held whenever called by the
Chairman or by two or more of the directors.
Section 4.10. QUORUM OF AND ACTION BY DIRECTORS.
---------------------------------
<PAGE>
(a) General Rule. A majority of the directors in
------------
office of the corporation shall be necessary to constitute a
quorum for the transaction of business and the acts of a majority
of the directors present and voting at a meeting at which a
quorum 15 present shall be the acts of the Board of Directors.
(b) Action by Written Consent. Any action
-------------------------
required or permitted to be taken at a meeting of the directors
may be taken without a meeting if, prior or subsequent to the
action, a consent or consents thereto by all of the directors in
office is filed with the Secretary of the corporation.
Section 4.11. EXECUTIVE AND OTHER COMMITTEES.
------------------------------
(a) Establishment and Powers. The Board of
------------------------
Directors may, by resolution adopted by a majority of the
directors in office, establish one or more committees to consist
of one or more directors of the corporation. Any committee, to
the extent provided in the resolution of the Board of Directors,
shall have and may exercise all of the powers and authority of
the Board of Directors except that a committee shall not have any
power or authority as to the following:
(1) The submission to shareholders of any
action requiring approval of shareholders under the Business
Corporation Law;
(2) The creation or filling of vacancies in
the Board of Directors;
<PAGE>
(3) The adoption, amendment or repeal of
these By- Laws;
(4) The amendment or repeal of any
resolution of the board that by its terms is amendable or
repealable only by the board; and/or
(5) Action on matters committed by a
resolution of the Board of Directors to another committee of
the board.
(b) Alternate Committee Members. The board may
---------------------------
designate one or more directors as alternate members of any
committee who may replace any absent or disqualified member at
any meeting of the committee or for the purposes of any written
action of the committee. In the absence or disqualification of a
member and alternate member or members of a committee, the member
or members thereof present at any meeting and not disqualified
from voting, whether or not constituting a quorum, may
unanimously appoint another director to act at the meeting in the
place of the absent or disqualified member.
(c) Term. Each committee of the board shall
----
serve at the pleasure of the board.
(d) Committee Procedures. The term "Board of
--------------------
Directors" or "Board," when used in any provisions of these By-
Laws relating to the organization or procedures of or the manner
of taking action by the Board of Directors, shall be construed to
<PAGE>
include and refer to any executive or other committee of the
board.
Section 4.12. COMPENSATION. The Board of Directors
------------
shall have the authority to fix compensation of directors for
their services as directors and a director may be a salaried
officer of the corporation.
ARTICLE V
---------
OFFICERS
Section 5.01. OFFICERS GENERALLY.
------------------
(a) Number, Qualification and Designation. The
-------------------------------------
officers of the corporation shall be a President, a Secretary, a
Treasurer, and such other officers as may be elected in
accordance with the provisions of Section 5.03. Officers may but
need not be directors or shareholders of the corporation. The
President and Secretary shall be natural persons of full age.
The Treasurer may be a corporation, but if a natural person shall
be of full age. The Board of Directors may elect from among the
members of the board a Chairman of the board and a Vice Chairman
of the board who shall be officers of the corporation. Any
number of offices may be held by the same person.
(b) Resignations. Any officer may resign at any
------------
time upon written notice to the corporation. The resignation
shall be effective upon receipt thereof by the corporation or at
<PAGE>
such subsequent time as may be specified in the notice of
resignation.
(c) Bonding. The corporation may secure the
-------
fidelity of any or all of its officers by bond or otherwise.
(d) Standard of Care. Except as otherwise
----------------
provided in the Articles, an officer shall perform his or her
duties as an officer in good faith, in a manner he or she
reasonably believes to be in the best interests of the
corporation and with such care, including reasonable inquiry,
skill and diligence, as a person of ordinary prudence would use
under similar circumstances. A person who so performs his or her
duties shall not be liable by reason of having been an officer of
the corporation.
Section 5.02. ELECTION AND TERM OF OFFICE. The
---------------------------
officers of the corporation, except those elected by delegated
authority pursuant to Section 5.03, shall be elected annually by
the Board of Directors, and each such officer shall hold office
for a term of one year and until a successor has been selected
and qualified or until his or her earlier death, resignation or
removal.
Section 5.03. SUBORDINATE OFFICERS, COMMITTEES AND
------------------------------------
AGENTS. The Board of Directors may from time to time elect such
------
other officers and appoint such committees, employees or other
agents as the business of the corporation may require, including
<PAGE>
one or more Assistant Secretaries, and one or more Assistant
Treasurers, each of whom shall hold office for such period, have
such authority, and perform such duties as are provided in these
By-Laws or as the Board of Directors may from time to time
determine. The Board of Directors may delegate to any officer or
committee the power to elect subordinate officers and to retain
or appoint employees or other agents, or committees thereof and
to prescribe the authority and duties of such subordinate
officers, committees, employees or other agents.
Section 5.04. REMOVAL OF OFFICERS AND AGENTS. Any
------------------------------
officer or agent of the corporation may be removed by the Board
of Directors with or without cause. The removal shall be without
prejudice to the contract rights, if any, of any person so
removed. Election or appointment of an officer or agent shall
not of itself create contract rights.
Section 5.05. VACANCIES. A vacancy in any office
---------
because of death, resignation, removal, disqualification or any
other cause, shall be filled by the Board of Directors or by the
officer or committee to which the power to fill such office has
been delegated pursuant to Section 5.03, as the case may be, and
if the office is one for which these By-Laws prescribe a term,
shall be filled for the unexpired portion of the term.
Section 5.06. AUTHORITY. All officers of the
---------
corporation, as between themselves and the corporation, shall
<PAGE>
have such authority and perform such duties in the management of
the corporation as may be provided by or pursuant to resolution
or orders of the Board of Directors or in the absence of
controlling provisions in theresolutions or orders of the Board
of Directors, as may be determined by or pursuant to these By-
Laws.
Section 5.07. THE CHAIRMAN OF THE BOARD. The Chairman
-------------------------
of the Board if there be one, or in the absence of the Chairman,
the Vice Chairman of the board, shall preside at all meetings of
the shareholders and of the Board of Directors and shall perform
such other duties as may from time to time be requested by the
Board of Directors.
Section 5.08. THE PRESIDENT. The President shall be
-------------
the Chief Executive Officer of the corporation and shall have
general supervision over the business and operations of the
corporation, subject however, to the control of the Board of
Directors. The president shall sign, execute, and acknowledge,
in the name of the corporation, deeds, mortgages, contracts or
other instruments authorized by the Board of Directors, except in
cases where the signing and execution thereof shall be expressly
delegated by the Board of Directors, or by these By-Laws, to some
other officer or agent of the corporation; and, in general, shall
perform all duties incident to the office of President and such
<PAGE>
other duties as from time to time may be assigned by the Board of
Directors.
Section 5.09. THE SECRETARY. The Secretary or an
-------------
Assistant Secretary shall attend all meetings of the shareholders
and of the Board of Directors and shall record all votes of the
shareholders and of the directors and the minutes of the meetings
of the shareholders and of the Board of Directors and of
committees of the board in a book or books to be kept for that
purpose; shall see that notices are given and records and reports
properly kept and filed by the corporation as required by law;
shall be the custodian of the seal of the corporation and see
that it is affixed to all documents to be executed on behalf of
the corporation under its seal; and, in general, shall perform
all duties incident to the office of Secretary, and such other
duties as may from time to time be assigned by the Board of
Directors or the President.
Section 5.10. THE TREASURER. The Treasurer or an
-------------
Assistant Treasurer shall have or provide for the custody of the
funds or other property of the corporation; shall collect and
receive or provide for the collection and receipt of moneys
earned by or in any manner due to or received by the corporation;
shall deposit all funds in his or her custody as Treasurer in
such banks or other places of deposit as the Board of Directors
may from time to time designate; shall, whenever so required by
<PAGE>
the Board of Directors, render an account showing all
transactions as Treasurer and the financial condition of the
corporation; and, in general, shall discharge such other duties
as may from time to time be assigned by the Board of Directors or
the President.
Section 5.11. SALARIES. The salaries of the officers
--------
elected by the Board of Directors shall be fixed from time to
time by the Board of Directors or by such officer as may be
designated by resolution of the board. The salaries or other
compensation of any other officers, employees and other agents
shall be fixed from time to time by the officer or committee to
which the power to elect officers or to retain or appoint such
employees or other agents has been delegated pursuant to Section
5.03. No officer can be prevented from receiving such
salary or other compensation by reason of the fact that the
officer is also a director of the corporation.
Section 5.12. DISALLOWED COMPENSATION. Any payments
-----------------------
made to officer or employee of the corporation such as a salary,
permission, bonus, interest, rent, travel or entertainment
expense incurred by him, which shall be disallowed in whole or in
part as a deductible expense by the Internal Revenue Service,
shall be reimbursed by such officer or employee to the
corporation to the extent of such disallowance. It shall be the
duty of the directors, as a Board, to enforce payment of each
<PAGE>
such amount as allowed. In lieu of payment by the officer or
employee, subject to the determination of the directors,
proportionate amounts may be withheld from future compensation
payments until the amount owed to the corporation has been
recovered.
ARTICLE VI
---------
CERTIFICATES OF STOCK, TRANSFER, ETC.
Section 6.01. SHARE CERTIFICATES. Certificates for
------------------
shares of the corporation shall be in such form as approved by
the Board of Directors, and shall state that the corporation is
incorporated under the laws of Pennsylvania, the name of the
person to whom issued, and the number and class of shares and the
designation of the series (if any) that the certificate
represents. The share register or transfer books and blank share
certificates shall be kept by the Secretary or by any transfer
agent or registrar designated by the Board of Directors for that
purpose.
Section 6.02. ISSUANCE. The share certificates of the
--------
corporation shall be numbered and registered in the share
register or transfer books of the corporation as they are issued.
[They shall be signed by the President or a Vice President and by
the Secretary or an Assistant Secretary or the Treasurer or an
Assistant Treasurer, and shall bear the corporate seal, which may
<PAGE>
be a facsimile, engraved or printed; but where such certificate
is signed by a transfer agent or a registrar the signature of any
corporate officer upon such certificate may be a facsimile,
engraved or printed. In case any officer who has signed, or
whose facsimile signature has been placed upon, any share
certificate shall have ceased to be such officer because of
death, resignation or otherwise, before the certificate is
issued, it may be issued with the same effect as if the officer
had not ceased to be such at the date of its issue. The
provisions of this Section 6.02 shall be subject to any
inconsistent or contrary agreement at the time between the
corporation and any transfer agent or registrar.
Section 6.03. Transfers of shares shall be made on the
share register or transfer books of the corporation upon
surrender of the certificate therefor, endorsed by the person
named in the certificate or by an attorney lawfully constituted
in writing. No transfer shall be made inconsistent with the
provisions of the Uniform Commercial Code, 13 Pa.C.S. 8101 et
seq., and its amendments and supplements.
Section 6.04. RECORD HOLDER OF SHARES. The
-----------------------
corporation shall be entitled to treat the person in whose name
any share or shares of the corporation stand on the books of the
corporation as the absolute owner thereof, and shall not be bound
<PAGE>
to recognize any equitable or other claim to, or interest in,
such share or shares on the part of any other person.
Section 6.05. LOST, DESTROYED OR MUTILATED
----------------------------
CERTIFICATES. The holder of any shares of the corporation shall
------------
immediately notify the corporation of any loss, destruction or
mutilation of the certificate therefor, and the Board of
Directors may, in its discretion, cause a new certificate or
certificates to be issued to such holder, in case of mutilation
of the certificate, upon the surrender of the mutilated
certificate or, in case of loss or destruction of the
certificate, upon satisfactory proof of such loss or destruction
and, if the Board of Directors shall so determine, the deposit of
a bond in such form and in such sum, and with such surety or
sureties, as it may direct.
ARTICLE VII
---------
INDEMNIFICATION OF DIRECTORS, OFFICERS AND
OTHER AUTHORIZED REPRESENTATIVES
Section 7.01. SCOPE OF INDEMNIFICATION.
------------------------
(a) General Rule. The corporation shall
------------
indemnify an indemnified representative against any liability
incurred in connection with any proceeding in which the
indemnified representative may be involved as a party or
otherwise by reason of the act that such person is or was serving
<PAGE>
in an indemnified capacity, including, without limitation,
liabilities resulting from any actual or alleged breach or
neglect of duty, error, misstatement or misleading statement,
negligence, gross negligence or act giving rise to strict or
products liability, except:
(1) where such indemnification is expressly
prohibited by applicable law;
(2) where the conduct of the indemnified
representative has been finally determined pursuant to
Section 7.06 or otherwise:
(i) to constitute willful misconduct or
recklessness within the meaning of 15 Pa.C.S.
513(b) and 1746(b) and 42 Pa.C.S. 8365(b) or any
superseding provision of law sufficient in the
circumstances to bar indemnification against
liabilities arising from the conduct; or
(ii) to be based upon or attributable to
the receipt by the indemnified representative from
the corporation of a personal benefit to which the
indemnified representative is not legally
entitled; or
(iii) to the extent such indemnification
has been finally determined in a final adjudica
<PAGE>
tion pursuant to Section 7.06 to be otherwise
unlawful.
(b) Partial Payment. If an indemnified
---------------
representative is entitled to indemnification in respect of a
portion, but not all, of any liabilities to which such person may
be subject, the corporation shall indemnify such indemnified
representative to the maximum extent for such portion of the
liabilities.
(c) Presumption. The termination of a proceeding
-----------
by judgment, order, settlement or conviction or upon a plea of
nolo contendere or its equivalent shall not of itself create a
presumption that the indemnified representative is not entitled
to indemnification.
(d) Definitions. For purposes of this Article:
-----------
(1) "indemnified capacity" means any and all
past, present and future service by an indemnified representative
in one or more capacities as a director, officer, employee or
agent of the corporation, or, at the request of the corporation,
as a director, officer, employee, agent, fiduciary or trustee of
another corporation, partnership, joint venture, trust, employee
benefit plan or other entity or enterprise;
(2) "indemnified representative" means any
and all directors and officers of the corporation and any other
person designated as an indemnified representative by the Board
<PAGE>
of Directors of the corporation (which may, but not, include any
person serving at the request of the corporation, as a director,
officer, employee, agent, fiduciary or trustee of another
corporation, partnership, joint venture, trust, employee benefit
plan or other entity or enterprise);
(3) "liability" means any damage, judgment,
amount paid in settlement, fine, penalty, punitive damages,
excise tax assessed with respect to an employee benefit plan, or
cost or expense, of any nature (including, without limitation,
attorneys' fees and disbursements); and
(4) "proceedings" means any threatened,
pending or completed action, suit, appeal or other proceeding of
any nature, whether civil, criminal, administrative or
investigative, whether formal or informal, and whether brought by
or in the right of the corporation, a class of its security
holders or otherwise.
Section 7.02. PROCEEDINGS INITIATED BY INDEMNIFIED
------------------------------------
REPRESENTATIVES. Notwithstanding any other provision of this
---------------
Article, the corporation shall not indemnify under this Article
an indemnified representative for any liability incurred in a
proceeding initiated (which shall not be deemed to include
counterclaims or affirmative defenses) or participated in as an
intervenor or amicus curiae by the person seeking indemnification
unless such initiation of or participation in the proceeding is
<PAGE>
authorized, either before or after its commencement, by the
affirmative vote of a majority of the directors in office. This
section does not apply to a reimbursement of expenses incurred in
successfully prosecuting or defending an arbitration under
Section 7.06 or otherwise successfully prosecuting or defending
the rights of an indemnified representative granted by or
pursuant to this Article.
Section 7.03. ADVANCING EXPENSES. The corporation
------------------
shall pay the expenses (including attorneys' fees and
disbursements) incurred in good faith by an indemnified
representative in advance of the final disposition of a
proceeding described in Section 7.01 or the initiation of or
participation in which is authorized pursuant to Section 7.02
upon receipt of an undertaking by or on behalf of the indemnified
representative to repay the amount if it is ultimately determined
pursuant to Section 7.06 that such person is not entitled to be
indemnified by the corporation pursuant to this Article. The
financial ability of an indemnified representative to repay an
advance shall not be a prerequisite to the making of such
advance.
Section 7.04. SECURING OF INDEMNIFICATION OBLIGATIONS.
---------------------------------------
To further effect, satisfy or secure the indemnification
obligations provided herein or otherwise, the corporation may
maintain insurance, obtain a letter of credit, act as self-
<PAGE>
insurer, create a reserve, trust, escrow, cash collateral or
other fund or account, enter into indemnification agreements,
pledge or grant a security interest in any assets or properties
of the corporation, or use any other mechanism or arrangement
whatsoever in such amounts, at such costs, and upon such other
terms and conditions as the Board of Directors shall deem
appropriate. Absent fraud, the determination of the Board of
Directors with respect to such amounts, costs, terms and
conditions shall be conclusive against all security holders,
officers and directors and shall not be subject to voidability.
Section 7.05. PAYMENT OF INDEMNIFICATION. An
--------------------------
indemnified representative shall be entitled to indemnification
within thirty (30) days after a written request for
indemnification has been delivered to the Secretary of the
corporation.
Section 7.06. ARBITRATION.
-----------
(a) General Rule. Any dispute related to the
------------
right to indemnification, contribution or advancement of expenses
as provided under this Article, except with respect to
indemnification for liabilities arising under the Securities Act
of 1933 that the corporation has undertaken to submit to a court
for adjudication, shall be decided only by arbitration in the
metropolitan area in which the principal executive offices of the
corporation are located at the time, in accordance with the
<PAGE>
commercial arbitration rules then in effect of the American
Arbitration Association, before a panel of three arbitrators, one
of whom shall be selected by the corporation, the second of whom
shall be selected by the indemnified representative and third of
whom shall be selected by the other two arbitrators. In the
absence of the American Arbitration Association, or if for any
reason arbitration under the arbitration rules of the American
Arbitration Association cannot be initiated, or if one of the
parties fails or refuses to select an arbitrator or if the
arbitrators selected by the corporation and the indemnified
representative cannot agree on the selection of the third
arbitrator within thirty (30) days after such time as the
corporation and the indemnified representative have each been
notified of the selection of the other's arbitrator, the
necessary arbitrator or arbitrators shall be selected by the
presiding judge of the court of general jurisdiction in such
metropolitan area.
(b) Burden of Proof. The party or parties
---------------
challenging the right of an indemnified representative to the
benefits of this Article shall have the burden of proof.
(c) Expenses. The corporation shall reimburse
--------
an indemnified representative for the expenses (including
attorneys' fees and disbursements) incurred unsuccessfully
prosecuting or defending such arbitration.
<PAGE>
(d) Effect. Any award entered by the arbitrators
------
shall be final, binding and nonappealable and judgment may be
entered thereon by any party in accordance with applicable law in
any court of competent jurisdiction, except that the corporation
shall be entitled to interpose as a defense in any such judicial
enforcement proceeding any prior final judicial determination
adverse to the indemnified representative under Section 7.01 (a)
(2) in a proceeding directly involving indemnification under this
Article. This arbitration provision shall be specifically
enforceable.
Section 7.07. CONTRIBUTION. If the indemnification
------------
provided for in this Article or otherwise is unavailable for any
reason in respect of any liability or portion thereof, the
corporation shall contribute to the liabilities to which the
indemnified representative may be subject in such proportion as
is appropriate to reflect the intent of this Article or
otherwise.
Section 7.08. MANDATORY INDEMNIFICATION OF DIRECTORS,
---------------------------------------
OFFICERS, ETC. To the extent that an authorized representative
--------------
of the corporation has been successful on the merits or otherwise
in defense of any action or proceeding referred to in 15 Pa.C.S.
1741 or 1742 or in defense of any claim, issue or matter therein,
such person shall be indemnified against expenses (including
<PAGE>
attorneys' fees and disbursements) actually and reasonably
incurred by such person in connection therewith.
Section 7.09. CONTRACT RIGHTS; AMENDMENT OR REPEAL.
------------------------------------
All rights under this Article shall be deemed a contract between
the corporation and the indemnified representative pursuant to
which the corporation and each indemnified representative intend
to be legally bound. Any repeal, amendment or modification
hereof shall be prospective only and shall not affect any rights
or obligations then existing.
Section 7.10. SCOPE OF ARTICLE. The rights granted by
----------------
this Article shall not be deemed exclusive of any other rights to
which those seeking indemnification, contribution or advancement
of expenses may be entitled under any statute, agreement, vote of
shareholders or disinterested directors or otherwise both as to
action in an indemnified capacity and as to action in any other
capacity. The indemnification, contribution and advancement of
expenses provided by or granted pursuant to this Article shall
continue as to a person who has ceased to be an indemnified
representative in respect of matters arising prior to such time,
and shall inure to the benefit of the heirs, executors,
administrators and personal representatives of such a person.
Section 7.11. RELIANCE OF PROVISIONS. Each person who
----------------------
shall act as an indemnified representative of the corporation
<PAGE>
shall be deemed to be doing so in reliance upon the rights
provided in this Article.
Section 7.12. INTERPRETATION. The provisions of this
--------------
Article are intended to constitute By-Laws authorized by 15
Pa.C.S. 513 and 1746 and 42 Pa.C.S. 8365.
ARTICLE VIII
MISCELLANEOUS
Section 8.01. CORPORATE SEAL. The corporate seal
--------------
shall have inscribed thereon the name of the corporation, the
year of its organization and the words "Corporate Seal,
Pennsylvania".
Section 8.02. CHECKS. All checks, notes, bills of
------
exchange or other orders in writing shall be signed by such
person or persons as the Board of Directors or any person
authorized by resolution of the Board of Directors may from time
to time designate.
Section 8.03. CONTRACTS.
---------
(a) General Rule. Except as otherwise provided
------------
in the Business Corporation Law in the case of transactions that
require action by the shareholders, the Board of Directors may
authorize any officer or agent to enter into any contract or to
execute or deliver any instrument on behalf of the corporation,
and such authority may be general or confined to specific
instances.
<PAGE>
(b) Statutory Form of Execution of Instruments.
------------------------------------------
Any note, mortgage, evidence of indebtedness, contract or other
document, or any assignment or endorsement thereof, executed or
entered into between the corporation and any other person, when
signed by one or more officers or agents having actual or
apparent authority to sign it, or by the President or Vice
President and Secretary or Assistant Secretary or Treasurer or
Assistant Treasurer of the corporation, shall be held to have
been properly executed for and on behalf of the corporation,
without prejudice to the rights of the corporation against any
person who shall have executed the instrument in excess of his or
her actual authority.
Section 8.04. INTERESTED DIRECTORS OR OFFICERS:
---------------------------------
QUORUM.
------
(a) General Rule. A contract or transaction
------------
between the corporation and one or more of its directors or
officers or between the corporation and another corporation,
partnership, joint venture, trust or other enterprise in which
one or more of its directors or officers are directors or
officers or have a financial or other interest, shall not be void
or voidable solely for that reason, or solely because the
director or officer is present at or participates in the meeting
of the Board of Directors that authorizes the contract or
transaction, or solely because his, her or their votes are
counted for that purpose, if:
<PAGE>
(1) the material facts as to the
relationship or interest and as to the contract or
transaction are disclosed or are known to the Board of
Directors and the board authorizes the contract or
transaction by the affirmative votes of a majority of the
disinterested directors even though the disinterested
directors are less than a quorum;
(2) the material facts as to his or her
relationship or interest and as to the contract or
transaction are disclosed or are known to the shareholders
entitled to vote thereon and the contract or transaction is
specifically approved in good faith by vote of those
shareholders; or
(3) the contract or transaction is fair as
to the corporation as of the time it is authorized, approved
or ratified by the Board of Directors or the shareholders.
(b) Quorum. Common or interested directors may
------
be counted in determining the presence of quorum at a meeting of
the board which authorizes a contract or transaction specified in
Section 8.4(a).
Section 8.05. DEPOSITS. All funds of the corporation
--------
shall be deposited from time to time to the credit of the
corporation in such banks, trust companies or other depositories
as the Board of Directors may approve or designate, and all such
<PAGE>
funds shall be withdrawn only upon checks signed by such one or
more officers or employees as the Board of Directors shall from
time to time determine.
Section 8.06. CORPORATE RECORDS.
-----------------
(a) Required Records. The corporation shall keep
----------------
complete and accurate books and records of account, minutes of
the proceedings of the incorporators, shareholders and directors
and a share register giving the names and addresses of all
shareholders and the number and class of shares held by each.
The share register shall be kept at either the registered office
of the corporation in Pennsylvania or at its principal place of
business wherever situated or at the office of its registrar or
transfer agent. Any books, minutes or other records may be in
written form or any other form capable of being converted into
written form within a reasonable time.
(b) Right of Inspection. Every shareholder
-------------------
shall, upon written verified demand stating the purpose thereof,
have a right to examine, in person or by agent or attorney,
during the usual hours for business for any proper purpose, the
share register, books and records of account, and records of the
proceedings of the incorporators, shareholders and directors and
to make copies or extracts therefrom. A proper purpose shall
mean a purpose reasonably related to the interest of the person
as a shareholder. In every instance where an attorney or other
<PAGE>
agent is the person who seeks the right of inspection, the demand
shall be accompanied by a verified power of attorney or other
writing that authorizes the attorney or other agent to so act on
behalf of the shareholder. The demand shall be directed to the
corporation at, its registered office in Pennsylvania or at its
principal place of business wherever situated.
Section 8.07. FINANCIAL REPORTS. Unless otherwise
-----------------
agreed between the corporation and a shareholder, the corporation
shall furnish to its shareholders annual financial statements,
including at least a balance sheet as of the end of each fiscal
year and a statement of income and expenses for the fiscal year.
The financial statements shall be prepared on the basis of
generally accepted accounting principles, if the corporation
prepares financial statements for the fiscal year on that basis
for any purpose, and may be consolidated statements of the
corporation and one or more of its subsidiaries. The financial
statements shall be mailed by the corporation to each of its
shareholders entitled thereto within one hundred twenty (120)
days after the close of each fiscal year and, after the mailing
and upon written request, shall be mailed by the corporation to
any shareholder or beneficial owner entitled thereto to whom a
copy of the most recent annual financial statements has not
previously been mailed. Statements that are audited or reviewed
by a public accountant shall be accompanied by the report of the
<PAGE>
accountant; in other cases, each copy shall be accompanied by a
statement of the person in charge of the financial records of the
corporation:
(1) stating his reasonable belief as to
whether or not the financial statements were prepared in
accordance with generally accepted accounting principles
and, if not, describing the basis of presentation.
(2) Describing any material respects in
which the financial statements were not prepared on a basis
consistent with those prepared for the previous year.
Section 8.08. AMENDMENT OF BY-LAWS. These By-Laws may
--------------------
be amended or repealed, or new By-Laws may be adopted, either (i)
by vote of the shareholders at any duly organized annual or
special meetIng of shareholders, or (ii) with respect to those
matters that are not by statute committed expressly to the
shareholders and regardless of whether the shareholders have
previously adopted or approved the By-Law being amended or
repealed, by vote of a majority of the Board of Directors of the
corporation in office at any regular or special meeting of
directors. Any change in these By-Laws shall take effect when
adopted unless otherwise provided in the resolution effecting the
change. See Section 2.03(b) relating to notice of action by
shareholders on By-Laws.
NYFS06...:\47\41847\0008\1710\BYLD136P.180
Exhibit 3.2(w)(i)
<PAGE>
BYLAWS
OF
MONETARY MANAGEMENT CORPORATION OF PENNSYLVANIA
ARTICLE I
SHAREHOLDERS
------------
1. ANNUAL MEETING
--------------
A meeting of the shareholders shall be held annually for the
election of directors and the transaction of other business on such
date in each year as may be determined by the Board of Directors, but
in no event later than 100 days after the anniversary of the date of
incorporation of the Corporation.
2. SPECIAL MEETINGS
----------------
Special meeting of the shareholders may be called by the
Board of Directors, Chairman of the Board or President and shall be
called by the Board upon the written request of the holders of record
of a majority of the outstanding shares of the Corporation entitled to
vote at the meeting requested to be called. Such request shall state
the purpose or purposes of the proposed meeting. At such special
meetings the only business which may be transacted is that relating to
the purpose or purposes set forth in the notice thereof.
3. PLACE OF MEETINGS
-----------------
Meetings of the shareholders shall be held at such place
within or outside of the State of Delaware as may be fixed
<PAGE>
by the Board of Directors. If no place is so fixed, such meetings
shall be held at the principal office of the Corporation.
4. NOTICE OF MEETINGS
------------------
Notice of each meeting of the shareholders shall be given in
writing and shall state the place, date and hour of the meeting and
the purpose or purposes for which the meeting is called. Notice of a
special meeting shall indicate that it is being issued by or at the
direction of the person or persons calling or requesting the meeting.
If, at any meeting, action is proposed to be taken which, if
taken, would entitle objecting shareholders to receive payment for
their shares, the notice shall include a statement of that purpose and
to that effect.
A copy of the notice of each meeting shall be given,
personally or by first class mail, not less than ten nor more than
fifty days before the date of the meeting, to each shareholder
entitled to vote at such meeting. If mailed, such notice shall be
deemed to have been given when deposited in the United States mail,
with postage thereon prepaid, directed to the shareholder at his
address as it appears on the record of the shareholders, or, if he
shall have filed with the Secretary of the Corporation a written
request that notices to him or her be
<PAGE>
mailed to some other address, then directed to him at such other
address.
When a meeting is adjourned to another time or place, it
shall not be necessary to give any notice of the adjourned meeting if
the time and place to which the meeting is adjourned are announced at
the meeting at which the adjournment is taken. At the adjourned
meeting any business may be transacted that might have been transacted
on the original date of the meeting. However, if after the
adjournment the Board of Directors fixes a new record date for the
adjourned meeting, a notice of the adjourned meeting shall be given to
each shareholder of record on the new record date entitled to notice
under this Section 4.
5. WAIVER OF NOTICE
----------------
Notice of a meeting need not be given to any shareholder who
submits a signed waiver of notice, in person or by proxy, whether
before or after the meeting. The attendance of any shareholder at a
meeting, in person or by proxy, without protesting prior to the
conclusion of the meeting the lack of notice of such meeting, shall
constitute a waiver of notice by him or her.
6. INSPECTORS OF ELECTION
----------------------
The Board of Directors, in advance of any shareholders'
meeting, may appoint one or more inspectors to act at the meeting or
any adjournment thereof. If inspectors are not so appointed,
<PAGE>
the person presiding at a shareholders' meeting may, and on the
request of any shareholder entitled to vote thereat shall, appoint two
inspectors. In case any person appointed fails to appear or act, the
vacancy may be filled by appointment in advance of the meeting by the
Board or at the meeting by the person presiding thereat. Each
inspector, before entering upon the discharge of his duties, shall
take and sign an oath faithfully to execute the duties of such
inspector at such meeting with strict impartiality and according to
the best of his ability.
The inspectors shall determine the number of shares
outstanding and the voting power of each, the shares represented at
the meeting, the existence of a quorum, and the validity and effect of
proxies, and shall receive votes, ballots or consents, hear and
determine all challenges and questions arising in connection with the
right to vote at the meeting, count and tabulate the votes, ballots or
consents, determine the result thereof, and do such acts as are proper
to conduct the election or vote with fairness to all shareholders. On
request of the person presiding at the meeting, or of any shareholder
entitled to vote thereat, the inspectors shall make a report in
writing of any challenge, question or matter determined by them and
shall execute a certificate of any fact found by them. Any report or
<PAGE>
certificate made by them shall be prima facie evidence of the facts
stated and of any vote certified by them.
7. LIST OF SHAREHOLDERS AT MEETINGS
--------------------------------
A list of the shareholders as of the record date, certified
by the Secretary or any Assistant Secretary or by a transfer agent,
shall be produced at any meeting of the shareholders upon the request
thereat or prior thereto of any shareholder. If the right to vote at
any meeting is challenged, the inspectors of election, or the person
presiding thereat, shall require such list of the shareholders to be
produced as evidence of the right of the persons challenged to vote at
such meeting, and all persons who appear from such list to be
shareholders entitled to vote thereat may vote at such meeting.
8. QUALIFICATION OF VOTERS
-----------------------
Unless otherwise provided in the Certificate of
Incorporation, every shareholder of record shall be entitled at every
meeting of the shareholders to one vote for every share standing in
its name on the record of the shareholders.
Treasury shares as of the record date and shares held as of
the record date by another domestic or foreign corporation of any
kind, if a majority of the shares entitled to vote in the election of
directors of such other corporation is held as of the record date by
the Corporation, shall not be shares entitled to
<PAGE>
vote or to be counted in determining the total number of outstanding
shares.
Shares held by an administrator, executor, guardian,
conservator, committee or other fiduciary, other than a trustee, may
be voted by such fiduciary, either in person or by proxy, without the
transfer of such shares into the name of such fiduciary. Shares held
by a trustee may be voted by him or her, either in person or by proxy,
only after the shares have been transferred into his name as trustee
or into the name of his nominee.
Shares standing in the name of another domestic or foreign
corporation of any type or kind may be voted by such officer, agent or
proxy as the bylaws of such corporation may provide, or, in the
absence of such provision, as the board of directors of such
corporation may determine.
No shareholder shall sell his vote, or issue a proxy to
vote, to any person for any sum of money or anything of value except
as permitted by law.
9. QUORUM OF SHAREHOLDERS
----------------------
The holders of a majority of the shares of the Corporation
issued and outstanding and entitled to vote at any meeting of the
shareholders shall constitute a quorum at such meeting for the
transaction of any business, provided that when a specified item of
business is required to be voted on by a class
<PAGE>
or series, voting as a class, the holders of a majority of the shares
of such class or series shall constitute a quorum for the transaction
of such specified item of business.
When a quorum is once present to organize a meeting, it is
not broken by the subsequent withdrawal of any shareholders.
The shareholders who are present in person or by proxy and
who are entitled to vote may, by a majority of the votes cast, adjourn
the meeting despite the absence of a quorum.
10. PROXIES
-------
Every shareholder entitled to vote at a meeting of the
shareholders, or to express consent or dissent without a meeting, may
authorize another person or persons to act for him by proxy.
Every proxy must be signed by the shareholder or its
attorney. No proxy shall be valid after the expiration of eleven
months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the shareholder
executing it, except as otherwise provided by law.
The authority of the holder of a proxy to act shall not be
revoked by the incompetence or death of the shareholder who executed
the proxy, unless before the authority is exercised written notice of
an adjudication of such incompetence or of such death is received by
the Secretary or any Assistant Secretary.
<PAGE>
11. VOTE OR CONSENT OF SHAREHOLDERS
-------------------------------
Directors, except as otherwise required by law, shall be
elected by a plurality of the votes cast at a meeting of shareholders
by the holders of shares entitled to vote in the election.
Whenever any corporate action, other than the election of
directors, is to be taken by vote of the shareholders, it shall,
except as otherwise required by law, be authorized by a majority of
the votes cast at a meeting of shareholders by the holders of shares
entitled to vote thereon.
Whenever shareholders are required or permitted to take any
action by vote, such action may be taken without a meeting on written
consent, setting forth the action so taken, signed by the holders of
all outstanding shares entitled to vote thereon. Written consent thus
given by the holders of all outstanding shares entitled to vote shall
have the same effect as an unanimous vote of shareholders.
12. FIXING THE RECORD DATE
----------------------
For the purpose of determining the shareholders entitled to
notice of or to vote at any meeting of shareholders or any adjournment
thereof, or to express consent to or dissent from any proposal without
a meeting, or for the purpose of determining shareholders entitled to
receive payment of any dividend or the allotment of any rights, or for
the purpose of
<PAGE>
any other action, the Board of Directors may fix, in advance, a date
as the record date for any such determination of shareholders. Such
date shall not be less than ten nor more than fifty days before the
date of such meeting, nor more than fifty days prior to any other
action.
When a determination of shareholders of record entitled to
notice of or to vote at any meeting of shareholders has been made as
provided in this Section, such determination shall apply to any
adjournment thereof, unless the Board of Directors fixes a new record
date for the adjourned meeting.
ARTICLE II
BOARD OF DIRECTORS
------------------
1. POWER OF BOARD AND QUALIFICATION OF DIRECTORS
---------------------------------------------
The business of the Corporation shall be managed by the
Board of Directors. Each director shall be at least eighteen years of
age.
2. NUMBER OF DIRECTORS
-------------------
The number of directors constituting the entire Board of
Directors shall be the number, not less than three nor more than ten,
fixed from time to time by a majority of the total number of directors
which the Corporation would have, prior to any increase or decrease,
if there were no vacancies, provided, however, that no decrease shall
shorten the term of an incumbent
<PAGE>
director, and provided further that if all of the shares of the
Corporation are owned beneficially and of record by less than three
shareholders, the number of directors may be less than three but not
less than the number of shareholders. Until otherwise fixed by the
directors, the number of directors constituting the entire Board shall
be one.
3. ELECTION AND TERM OF DIRECTORS
------------------------------
At each annual meeting of shareholders, directors shall be
elected to hold office until the next annual meeting and until their
successors have been elected and qualified or until their death,
resignation or removal in the manner hereinafter provided.
4. QUORUM OF DIRECTORS AND ACTION BY THE BOARD
-------------------------------------------
A majority of the entire Board of Directors shall constitute
a quorum for the transaction of business, and, except where otherwise
provided herein, the vote of a majority of the directors present at a
meeting at the time of such vote, if a quorum is then present, shall
be the act of the Board.
Any action required or permitted to be taken by the Board of
Directors or any committee thereof may be taken without a meeting if
all members of the Board or the committee consent in writing to the
adoption of a resolution authorizing the action. The resolution and
the written consent thereto by the members of the Board or committee
shall be filed with the minutes of the proceedings of the Board or
committee.
<PAGE>
5. MEETINGS OF THE BOARD
---------------------
An annual meeting of the Board of Directors shall be held in
each year directly after the annual meeting of shareholders. Regular
meetings of the Board shall be held at such times as may be fixed by
the Board. Special meetings of the Board may be held at any time upon
the call of the President or any two directors.
Meetings of the Board of Directors shall be held at such
places as may be fixed by the Board for annual and regular meetings
and in the notice of meeting for special meetings. If no place is so
fixed, meetings of the Board shall be held at the principal office of
the Corporation. Any one or more members of the Board of Directors
may participate in meetings by means of a conference telephone or
similar communications equipment.
No notice need be given of annual or regular meetings of the
Board of Directors. Notice of each special meeting of the Board shall
be given to each director either by mail not later than noon, Delaware
time, on the third day prior to the meeting or by telegram, written
message or orally not later than noon, Delaware time, on the day prior
to the meeting. Notices are deemed to have been properly given if
given: by mail, when deposited in the United States mail; by telegram
at the time of filing; or by messenger at the time of delivery.
Notices by mail, telegram or messenger shall be sent to each director
at the
<PAGE>
address designated by him for that purpose, or, if none has been so
designated, at his last known residence or business address.
Notice of a meeting of the Board of Directors need not be
given to any director who submits a signed waiver of notice whether
before or after the meeting, or who attends the meeting without
protesting, prior thereto or at its commencement, the lack of notice
to any director.
A notice, or waiver of notice, need not specify the purpose
of any meeting of the Board of Directors.
A majority of the directors present, whether or not a quorum
is present, may adjourn any meeting to another time and place. Notice
of any adjournment of a meeting to another time or place shall be
given, in the manner described above, to the directors who were not
present at the time of the adjournment and, unless such time and place
are announced at the meeting, to the other directors.
6. RESIGNATIONS
------------
Any director of the Corporation may resign at any time by
giving written notice to the Board of Directors or to the President or
to the Secretary of the Corporation. Such resignation shall take
effect at the time specified therein; and unless otherwise specified
therein the acceptance of such resignation shall not be necessary to
make it effective.
<PAGE>
7. REMOVAL OF DIRECTORS
--------------------
Any one or more of the directors may be removed for cause by
action of the Board of Directors. Any or all of the directors may be
removed with or without cause by vote of the shareholders.
8. NEWLY CREATED DIRECTORSHIPS AND VACANCIES
-----------------------------------------
Newly created directorships resulting from an increase in
the number of directors and vacancies occurring in the Board of
Directors for any reason except the removal of directors by
shareholders may be filled by vote of a majority of the directors then
in office, although less than a quorum exists. Vacancies occurring as
a result of the removal of directors by shareholders shall be filled
by the shareholder. A director elected to fill a vacancy shall be
elected to hold office for the unexpired term of his predecessor.
9. EXECUTIVE AND OTHER COMMITTEES OF DIRECTORS
-------------------------------------------
The Board of Directors, by resolution adopted by a majority
of the entire Board, may designate from among its members an executive
committee and other committees each consisting of three or more
directors and each of which, to the extent provided in the resolution,
shall have all the authority of the Board, except that no such
committee shall have authority as to the following matters: (a) the
submission to shareholders of any action that needs shareholders'
approval; (b) the filling
<PAGE>
of vacancies in the Board or in any committee; (c) the fixing of
compensation of the directors for serving on the Board or any
committee; (d) the amendment or repeal of the bylaws, or the adoption
of new bylaws; (e) the amendment or repeal of any resolution of the
Board which, by its term, shall not be so amendable or repealable; or
(f) the removal or indemnification of directors.
The Board of Directors may designate one or more directors
as alternate members of any such committee, who may replace any absent
member or members at any meeting of such committee.
Unless a greater proportion is required by the resolution
designating a committee, a majority of the entire authorized number of
members of such committee shall constitute a quorum for the
transaction of business, and the vote of a majority of the members
present at a meeting at the time of such vote, if a quorum is then
present, shall be the act of such committee.
Each such committee shall serve at the pleasure of the Board
of Directors.
10. COMPENSATION OF DIRECTORS
-------------------------
The Board of Directors shall have authority to fix the
compensation of directors for services in any capacity.
<PAGE>
11. INTEREST OF DIRECTORS IN A TRANSACTION
--------------------------------------
Unless shown to be unfair and unreasonable as to the
Corporation, no contract or other transaction between the Corporation
and one or more of its directors, or between the Corporation and any
other corporation, firm association or other entity in which one or
more of the directors are directors or officers, or are financially
interested, shall be either void or voidable, irrespective of whether
such interested director or directors are present at a meeting of the
Board of Directors, or of a committee thereof, which authorizes such
contract or transaction and irrespective of whether his or their votes
are counted for such purpose. In the absence of fraud any such
contract and transaction conclusively may be authorized or approved as
fair and reasonable by: (a) the Board of Directors or a duly
empowered committee thereof, by a vote sufficient for such purpose
without counting the vote or votes of such interested director or
directors (although such interested director or directors may be
counted in determining the presence of a quorum at the meeting which
authorizes such contract or transaction), if the fact of such common
directorship, officership or financial interest is disclosed or known
to the Board or committee, as the case may be; or (b) the shareholders
entitled to vote for the election of directors, if such common
<PAGE>
directorship, officership or financial interest is disclosed or know
to such shareholders.
Notwithstanding the foregoing, no loan, except advances in
connection with indemnification, shall be made by the Corporation to
any director unless it is authorized by vote of the shareholders
without counting any shares of the director who would be the borrower.
ARTICLE III
OFFICERS
--------
1. ELECTION OF OFFICERS
--------------------
The Board of Directors, as soon as may be practicable after
the annual election of directors, shall elect a Chairman of the Board,
a President, a Secretary, and a Treasurer, and from time to time may
elect or appoint such other officers as it may determine. Any two or
more offices may be held by the same person, except that the same
person may not hold the offices of President and Secretary. The Board
of Directors may also elect one or more Vice Presidents, Assistant
Secretaries and Assistant Treasurers.
2. OTHER OFFICERS
--------------
The Board of Directors may appoint such other officers and
agents as it shall deem necessary who shall hold their offices for
such terms and shall exercise such powers and perform
<PAGE>
such duties as shall be determined from time to time by the Board.
3. COMPENSATION
------------
The salaries of all officers and agents of the Corporation
shall be fixed by the Board of Directors.
4. TERM OF OFFICE AND REMOVAL
--------------------------
Each officer shall hold office for the term for which he is
elected or appointed, and until his successor has been elected or
appointed and qualified. Unless otherwise provided in the resolution
of the Board of Directors electing or appointing an officer, his term
of office shall extend to and expire at the meeting of the Board
following the next annual meeting of shareholders. Any officer may be
removed by the Board with or without cause, at any time. Removal of
an officer without cause shall be without prejudice to his contract
rights, if any, and the election or appointment of an officer shall
not of itself create contract rights.
5. CHAIRMAN OF THE BOARD
---------------------
The Chairman of the Board shall be the chief executive
officer of the Corporation, shall have general and active management
of the business of the Corporation and shall see that all orders and
resolutions of the Board of Directors are carried into effect. He
shall also preside at all meetings of the shareholders and the Board
of Directors.
<PAGE>
The Chairman of the Board shall execute bonds, mortgages and
other contracts requiring a seal, under the seal of the Corporation,
except where required or permitted by law to be otherwise signed and
executed and except where the signing and execution thereof shall be
expressly delegated by the Board of Directors to some other officer or
agent of the Corporation.
6. PRESIDENT
---------
The President shall be the chief operating officer of the
Corporation, shall have general and active management of the business
of the Corporation and shall see that all orders and resolutions of
the Board of Directors are carried into effect, subject to the
direction of the Chairman of the Board, and shall perform such other
duties and have such other powers as the Board of Directors may from
time to time prescribe.
7. VICE PRESIDENTS
---------------
The Vice Presidents, in the order designated by the Board of
Directors, or in the absence of any designation, then in the order of
their election, during the absence or disability of or refusal to act
by the President, shall perform the duties and exercise the powers of
the President and shall perform such other duties as the Board of
Directors shall prescribe.
8. SECRETARY AND ASSISTANT SECRETARIES
-----------------------------------
The Secretary shall attend all meetings of the Board of
Directors and all meetings of the shareholders and record all the
<PAGE>
proceedings of the meetings of the Corporation and of the Board of
Directors in a book to be kept for that purpose, and shall perform
like duties for the standing committees when required. The Secretary
shall give or cause to be given, notice of all meetings of the
shareholders and special meetings of the Board of Directors, and shall
perform such other duties as may be prescribed by the Board of
Directors or President, under whose supervision the Secretary shall
be. The Secretary shall have custody of the corporate seal of the
Corporation and the Secretary, or an Assistant Secretary, shall have
authority to affix the same to any instrument requiring it and when so
affixed, it may be attested by the Secretary's signature or by the
signature of such Assistant Secretary. The Board of Directors may
give general authority to any other officer to affix the seal of the
Corporation and to attest the affixing by his signature.
The Assistant Secretary, or if there be more than one, the
Assistant Secretaries in the order designated by the Board of
Directors, or in the absence of such designation then in the order of
their election, in the absence of the Secretary or in the event of the
Secretary's inability or refusal to act, shall perform the duties and
exercise the powers of the Secretary and shall perform such other
duties and have such other powers as the Board of Directors may from
time to time prescribe.
<PAGE>
9. TREASURER AND ASSISTANT TREASURERS
----------------------------------
The Treasurer shall have the custody of the corporate funds
and securities; shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation; and shall deposit
all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board
of Directors.
The Treasurer shall disburse the funds as may be ordered by
the Board of Directors, taking proper vouchers for such disbursements,
and shall render to the President and the Board of Directors, at its
regular meetings, or when the Board of Directors so requires, an
account of all his transactions as Treasurer and of the financial
condition of the Corporation.
If required by the Board of Directors, the Treasurer shall
give the Corporation a bond in such sum and with such surety or
sureties as shall be satisfactory to the Board of Directors for the
faithful performance of the duties of the office of Treasurer, and for
the restoration to the Corporation, in the case of the Treasurer's
death, resignation, retirement or removal from office, of all books,
papers, vouchers, money and other property of whatever kind in the
possession or under the control of the Treasurer belonging to the
Corporation.
The Assistant Treasurer, or if there shall be more than one,
the Assistant Treasurers in the order designated by the
<PAGE>
Board of Directors, or in the absence of such designation, then in the
order of their election, in the absence of the Treasurer or in the
event of the Treasurer's inability or refusal to act, shall perform
the duties and exercise the powers of the Treasurer and shall perform
such other duties and have such other powers as the Board of Directors
may from time to time prescribe.
10. BOOKS AND RECORDS
-----------------
The Corporation shall keep: (a) correct and complete books
and records of account; (b) minutes of the proceedings of the
shareholders, Board of Directors and any committees of directors; and
(c) a current list of the directors and officers and their residence
addresses. The Corporation shall also keep at its office in the State
of Delaware or at the office of its transfer agent or registrar in the
State of Delaware, if any, a record containing the names and addresses
of all shareholders, the number and class of shares held by each and
the dates when they respectively became the owners of record thereof.
The Board of Directors may determine whether and to what
extent and at what times and places and under what conditions and
regulations any accounts, books, records or other documents of the
Corporation shall be open to inspection, and no creditor security
holder or other person shall have any right to inspect any accounts,
books, records or other documents of the
<PAGE>
Corporation except as conferred by statute or as so authorized by the
Board.
11. CHECKS, NOTES, ETC.
-------------------
All checks and drafts on, and withdrawals from the Corporation's
accounts with banks or other financial institutions, and all bills of
exchange, notes and other instruments for the payment of money, drawn,
made, endorsed, or accepted by the Corporation, shall be signed on its
behalf by the person or persons thereunto authorized by, or pursuant
to resolution of, the Board of Directors.
ARTICLE IV
CERTIFICATES AND TRANSFERS OF SHARES
1. FORMS OF SHARE CERTIFICATES
---------------------------
The share of the Corporation shall be represented by
certificates, in such forms as the Board of Directors may prescribe,
signed by the President or a vice President and the Secretary or an
Assistant Secretary or the Treasurer or an Assistant Treasurer. The
shares may be sealed with the seal of the Corporation or a facsimile
thereof. The signatures of the officers upon a certificate may be
facsimiles if the certificate is countersigned by a transfer agent or
registered by a registrar other than the Corporation or its employee.
In case any officer who has signed or whose facsimile signature has
been placed upon a certificate shall have ceased to be such officer
before such
<PAGE>
certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer at the date of issue.
Each certificate representing shares issued by the
Corporation shall set forth upon the face or back of the certificate,
or shall state that the Corporation will furnish to any shareholder
upon request and without charge, a full statement of the designation,
relative rights, preferences and limitations of the shares of each
class of shares, if more than one, authorized to be issued and the
designation, relative rights, preferences and limitations of each
series of any class of preferred, shares authorized to be issued so
far as the same have been fixed, and the authority of the Board of
Directors to designate and the relative rights, preferences and
limitations of other series.
Each certificate representing shares shall state upon the
face thereof: (a) that the Corporation is formed under the laws of the
State of Delaware; (b) the name of the person or persons to whom
issues; and (c) the number and class of shares, and the designation of
the series, if any, which such certificate represents.
2. TRANSFERS OF SHARES
-------------------
Shares of the Corporation shall be transferable on the
record of shareholders upon presentment to the Corporation of a
transfer agent of a certificate or certificates representing the
<PAGE>
shares requested to be transferred, with proper endorsement on the
certificate or on a separate accompanying document, together with such
evidence of the payment of transfer taxes and compliance with other
provisions of law as the Corporation or its transfer agent may
require.
3. LOST, STOLEN OR DESTROYED SHARE CERTIFICATES
--------------------------------------------
No certificate for shares of the Corporation shall be issued
in place of any certificate alleged to have been lost, destroyed or
wrongfully taken, except, if and to the extent required by the Board
of Directors upon: (a) production of evidence of loss, destruction or
wrongful taking; (b)delivery of a bond indemnifying the Corporation
and its agents against any claim that may be made against it or them
on account of the alleged loss, destruction or wrongful taking of the
replaced certificate or the issuance of the new certificate; (c)
payment of the expenses of the Corporation and its agents incurred in
connection with the issuance of the new certificate; and (d)
compliance with other such reasonable requirements as may be imposed.
ARTICLE V
OTHER MATTERS
1. CORPORATE SEAL
--------------
The Board of Directors may adopt a corporate seal, alter
such seal at pleasure, and authorize it to be used by
<PAGE>
causing it or a facsimile to be affixed or impressed or reproduced in
any other manner.
2. FISCAL YEAR
-----------
The fiscal year of the Corporation shall be the twelve
months ending December 31st, or such other period as may be fixed by
the Board of Directors.
3. AMENDMENTS
----------
Bylaws of the Corporation may be adopted, amended or
repealed by vote of the holders of the shares at the time entitled to
vote in the election of any directors. Bylaws may also be adopted,
amended or repealed by the Board of Directors, but any bylaws adopted
by the Board may be amended or repealed by the shareholders entitled
to vote thereon as hereinabove provided.
If any bylaw regulating an impending election of directors
is adopted, amended or repealed by the Board of Directors, there shall
be set forth in the notice of the next meeting of shareholders for the
election of directors the bylaw so adopted, amended or repealed,
together with a concise statement of the changes made.
NYFS06...:\47\41847\0008\1710\CRTD136L.130
Exhibit 3.2(x)(i)
<PAGE>
MONETARY MANAGEMENT OF CALIFORNIA, INC.
* * * * *
BYLAWS
* * * * *
ARTICLE I
OFFICES
Section 1. The principal executive office shall be located
in Santa Anna, California.
Section 2. The corporation may also have offices at such
other places both within and without the State of California as the
board of directors may from time to time determine or the business of
the corporation may require.
ARTICLE II
ANNUAL MEETINGS OF SHAREHOLDERS
Section 1. All meetings of shareholders for the election of
directors shall be held in the City of New York, State of New York, at
such place as may be fixed from time to time by the board of
directors, or at such other place either within or without the State
of California as shall be designated from time to time by the board of
directors and stated in the notice of the meeting. Meetings of
shareholders for any other purpose may be held at such time and
place, within or without the State of California, as shall be stated
in the notice of the meeting or in
<PAGE>
a duly executed waiver of notice thereof. If no other place is stated
or fixed then shareholders' meetings shall be held at the principal
executive office of the corporation.
Section 2. Annual meetings of shareholders, Commencing with
the year 1988, shall be held on the second Tuesday in May if not a
legal holiday, and if a legal holiday, then on the next secular day
following at 10:00 A. M., or at such other date and time as shall be
designated from time to time by the board of directors and stated in
the notice of the meeting, at which they shall elect by a plurality
vote a board of directors, and transact such other business as may
properly be brought before the meeting.
Section 3. Written or printed notice of the annual meeting
stating the place, day and hour of the meeting shall be given to each
shareholder entitled to vote thereat not less than ten (or,if sent by
third-class mail, thirty) nor more than sixty days before the date of
the meeting. Notice may be sent by third-class mail only if the
outstanding shares of the corporation are held of record by five
hundred or more people (determined as provided in section 605 of the
California Corporations Code) on the record date for the shareholders'
meeting.
<PAGE>
ARTICLE III
SPECIAL MEETINGS OF SHAREHOLDERS
Section 1. Special meetings of shareholders for any purpose
other than the election of directors may be held at such time and
place within or without the State of California as shall be stated in
the notice of the meeting or in a duly executed waiver of notice
thereof.
Section 2. Special meetings of the shareholders, for any
purpose or purposes, unless otherwise prescribed by statute or by the
articles of incorporation, may be called by the president, the board
of directors, or the holders of not less than ten percent of all the
shares entitled to vote at the meeting and if the corporation has a
chairman of the board of directors then special meetings of the
shareholders may be called by the chairman.
Section 3. Written or printed notice of a special meeting
of shareholders, stating the time, place and purpose or purposes
thereof, shall be given to each shareholder entitled to vote thereat
not less than ten (or, if sent by third-class mail, thirty) nor more
than sixty days before the date fixed for the meeting. Notice may be
sent by third-class mail only if the outstanding shares of the
corporation are held of record by five hundred or more people
(determined as provided in section 605 of
<PAGE>
the California Corporations Code) on the record date for the
shareholders' meeting.
Section 4. The business transacted at any special meeting
of shareholders shall be limited to the purposes stated in the notice.
ARTICLE IV
QUORUM AND VOTING OF STOCK
Section 1. A majority of the shareholders, holding shares
of stock issued and outstanding and entitled to vote, represented in
person or by proxy, shall constitute a quorum at all meetings of the
shareholders for the transaction of business except as otherwise
provided by statute or by the articles of incorporation. If, however,
such quorum shall not be present or represented at any meeting of the
shareholders, the shareholders present in person or represented by
proxy shall have power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum
shall be present or represented. At such adjourned meeting at which a
quorum shall be present or represented any business may be transacted
which might have been transacted at the meeting as originally
notified.
Section 2. If a guorum is present, the affirmative vote of
a majority of the shares of stock represented and voting at the
meeting (which shares voting affirmatively also constitute
<PAGE>
at least a majority of the required quorum), shall be the act of the
shareholders unless the vote of a greater number of shares of stock is
required by law or the articles of incorporation.
Section 3. Each outstanding share of stock, having voting
power, shall be entitled to one vote on each matter submitted to a
vote at a meeting of shareholders. A shareholder may vote either in
person or by proxy executed in writing by the shareholder or by his
duly authorized attorney-in-fact.
In all elections for directors every shareholder complying
with section 708(b) of the California Corporations Code and entitled
to vote, shall have the right to vote, in person or by proxy, the
number of shares of stock owned by him, for as many persons as there
are directors to be elected, or to cumulate the vote of said shares,
and give one candidate a number of votes equal to the number of
directors to be elected multiplied by the number of votes to which the
shareholder's share are normally entitled, or to distribute the votes
on the same principle among as many candidates as he may see fit. As
provided in section 708(b) of the California Corporations Code no
shareholder shall be entitled to cumulate votes for any candidate for
the office of director unless such candidates' names have been placed
in nomination prior to the voting and at least one shareholder has
given notice at the meeting prior to the voting of his intention to
cumulate his votes.
<PAGE>
Section 4. Unless otherwise provided in the articles, any
action except election of directors which may be taken at any annual
or special meeting of shareholders may be taken without a meeting and
without prior notice, if a consent in writing, setting forth the
action so taken, shall be signed by the holders of outstanding shares
having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all
shares entitled to vote thereon were present and voted. Except to
fill a vacancy in the board of directors not filled by the directors,
directors may not be elected by written consent except by unanimous
written consent of all shares entitled to vote for the election of
directors. Any election of a director to fill a vacancy (other than a
vacancy created by removal) not filled by the directors reguires the
written consent of a majority of the shares entitled to vote.
ARTICLE V
DIRECTORS
Section 1. The number of directors shall be three.
Directors need not be residents of the State of California nor
shareholders of the corporation. The directors, other than the first
board of directors, shall be elected at the annual meeting of the
shareholders, and each director elected shall serve until the next
succeeding annual meeting and until his successor shall
<PAGE>
have been elected and qualified. The first board of directors shall
hold office until the first annual meeting of shareholders.
Section 2. Unless otherwise provided in the articles of
incorporation vacancies, except for a vacancy created by the removal
of a director, and newly created directorships resulting from any
increase in the number of directors may be filled by a majority of the
directors then in office, though less than a quorum, and the directors
so chosen shall hold office until the next annual election and until
their successors are duly elected and shall qualify. Unless otherwise
provided in the articles of incorporation any vacancy created by the
removal of a director shall be filled by the shareholders by the vote
of a majority of the shares entitled to vote at a meeting at which a
quorum is present. Any vacancies, which may be filled by directors
and are not filled by the directors, may be filled by the shareholders
by a majority of the shares entitled to vote at a meeting at which a
quorum is present.
Section 3. The business affairs of the corporation shall be
managed by its board of directors which may exercise all such powers
of the corporation and do all such lawful acts and things as are not
by statute or by the articles of incorporation or by these bylaws
directed or required to be exercised or done by the shareholders.
<PAGE>
Section 4. The directors may keep the books of the
corporation, except such as are required by law to be kept within the
state, outside of the State of California, at such place or places as
they may from time to time determine.
Section 5. The board of directors, by the affirmative vote
of a majority of the directors then in office, and irrespective of any
personal interest of any of its members, shall have authority to
establish reasonable compensation of all directors for services to the
corporation as directors, officers or otherwise.
ARTICLE VI
MEETINGS OF THE BOARD OF DIRECTORS
Section 1. Meetings of the board of directors, regular or
special, may be held either within or without the State of California.
Section 2. The first meeting of each newly elected board of
directors shall be held at such time and place as shall be fixed by
the vote of the shareholders at the annual meeting and no notice of
such meeting shall be necessary to the newly elected directors in
order legally to constitute the meeting, provided a quorum shall be
present, or it may convene at such place and time as shall be fixed by
the consent in writing of all the directors.
<PAGE>
Section 3. Regular meetings of the board of directors may
be held upon such notice, or without notice, and at such time and at
such place as shall from time to time be determined by the board.
Section 4. Special meetings of the board of directors may
be called by the president on one day's notice to each director,
either personally or by mail or by telephone or by telegram; special
meetings shall be called by the president or secretary in like manner
and on like notice on the written request of two directors unless the
board consists of only one director; in which case special meetings
shall be called by the president or secretary in like manner and on
like notice on the written request of the sole director.
Section 5. Attendance of a director at any meeting shall
constitute a waiver of notice of such meeting, except where a director
attends for the express purpose of objecting to the transaction of any
business because the meeting is not lawfully called or convened.
Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the board of directors need be specified
in the notice or waiver of notice of such meeting.
Section 6. A majority of the directors shall constitute a
quorum for the transaction of business unless a greater number is
required by law or by the articles of incorporation.
<PAGE>
The act of a majority of the directors present at any meeting at which
a quorum is present shall be the act of the board of directors, unless
the act of a greater number is required by statute or by the articles
of incorporation. If a quorum shall not be present at any meeting of
directors, the directors present thereat may adjourn the meeting from
time to time, without notice other than announcement at the meeting,
until a quorum shall be present.
Section 7. Any action required or permitted to be taken at
a meeting of the directors may be taken without a meeting if a consent
in writing, setting forth the action so taken, shall be signed by all
of the directors entitled to vote with respect to the subject matter
thereof.
ARTICLE VII
EXECUTIVE COMMITTEE
Section 1. The board of directors, by resolution
adopted by a majority of the number of directors fixed by the bylaws
or otherwise, may designate two or more directors to constitute an
executive committee, which committee, to the extent provided in such
resolution, shall have and exercise all of the authority of the board
of directors in the management of the corporation, except as otherwise
required by law. Vacancies in the membership of the committee shall
be filled by the board of
<PAGE>
directors at a regular or special meeting of the board of directors.
The executive committee shall keep regular minutes of its proceedings
and report the same to the board when required. The board of directors
may designate one or more directors as alternate members of the
executive committee. The executive committee shall not have
authority: (1) To approve any action which will also require the
shareholders' approval; (2) To fill vacancies on the board or in any
committee; (3) To fix the compensation of directors for serving on
the board or on any committee; (4) To amend or repeal the bylaws or
adopt new bylaws; (5) To amend or repeal any resolution of the board
which by its express terms is not so amendable or repealable; (6) To
make a distribution to the shareholders except at a rate or in a
periodic amount or within a price range determined by the board; or
(7) To appoint other committees of the board or the members thereof.
ARTICLE VIII
NOTICES
Section 1. Whenever, under the provisions of the statutes
or of the articles of incorporation or of these bylaws, notice is
required to be given to any director or shareholder, it shall not be
construed to mean personal notice, but such notice may be given in
writing, by mail, addressed to such director or
<PAGE>
shareholder, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be
deemed to be given at the time when the same shall be deposited in the
United States mail. Notice to directors may also be given by
telegram. Notice to any shareholder shall be given at the address
furnished by such shareholder for the purpose of receiving notice. If
such address is not given and if no address appears on the records of
the corporation for any shareholder then notice may be given to such
shareholder at the place where the principal executive office of the
corporation is located or by publication at least once in a newspaper
of general circulation in the county in which said principal executive
office is located. If a notice of a shareholders' meeting is sent by
mail it shall be sent by first-class mail, or, in case the corporation
has outstanding shares held of record by 500 or more persons
(determined as provided in section 605 of the California Corporations
Code) on the record date for the shareholders' meeting, notice may be
by third-class mail.
Section 2. Whenever any notice whatever is required to be
given under the provisions of the statutes or under the provisions of
the articles of incorporation of these bylaws, a waiver thereof in
writing signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice.
<PAGE>
ARTICLE IX
OFFICERS
Section 1. The officers of the corporation, except those
elected in accordance with Sec. 210 of the California General
Corporation Law, shall be chosen by the board of directors and shall
be a president, a vice-president, a secretary and a treasurer. The
board of directors may also choose additional vice-presidents, and one
or more assistant secretaries and assistant treasurers.
Section 2. The board of directors at its first meeting
after each annual meeting of shareholders shall choose a president,
one or more vice-presidents, a secretary and a treasurer, none of whom
need be a member of the board.
Section 3. The board of directors may appoint such other
officers and agents as it shall deem necessary who shall hold their
offices for such terms and shall exercise such powers and perform such
duties as shall be determined from time to time by the board of
directors.
Section 4. The salaries of all officers and agents of the
corporation shall be fixed by the board of directors.
Section 5. The officers of the corporation shall hold
office until their successors are chosen and qualify. Any officer
elected or appointed by the board of directors may be
<PAGE>
removed at any time by the affirmative vote of a majority of the board
of directors. Any vacancy occurring in any office of the corporation
shall be filled by the board of directors.
THE PRESIDENT
Section 6. The president shall be the chief executive
officer of the corporation, shall preside at all meetings of the
shareholders and the board of directors, shall have general and active
management of the business of the corporation and shall see that all
orders and resolutions of the board of directors are carried into
effect.
Section 7. He shall execute bonds, mortgages and other
contracts requiring a seal, under the seal of the corporation, except
where required or permitted by law to be otherwise signed and executed
and except where the signing and execution thereof shall be expressly
delegated by the board of directors to some other officer or agent of
the corporation.
THE VICE-PRESIDENTS
Section 8. The vice-president, or if there shall be more
than one, the vice-presidents in the order determined by the board of
directors, shall, in the absence or disability of the president,
perform the duties and exercise the powers of the
<PAGE>
president and shall perform such other duties and have such other
powers as the board of directors may from time to time prescribe.
THE SECRETARY AND ASSISTANT SECRETARIES
Section 9. The secretary shall attend all meetings of the
board of directors and all meetings of the shareholders and record all
the proceedings of the meetings of the corporation and of the board of
directors in a book to be kept for that purpose and shall perform like
duties for the standing committees when required. He shall give, or
cause to be given, notice of all meetings of the shareholders and
special meetings of the board of directors, and shall perform such
other duties as may be prescribed by the board of directors or
president, under whose supervision he shall be. He shall have custody
of the corporate seal of the corporation and he, or an assistant
secretary, shall have authority to affix the same to any instrument
requiring it and when so affixed, it may be attested by his signature
or by the signature of such assistant secretary. The board of
directors may give general authority to any other officer to affix the
seal of the corporation and to attest the affixing by his signature.
Section 10. The assistant secretary, or if there be more
than one, the assistant secretaries in the order determined by the
board of directors, shall, in the absence or disability of
<PAGE>
the secretary, perform the duties and exercise the powers of the
secretary and shall perform such other duties and have such other
powers as the board of directors may from time to time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 11. The treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the
corporation and shall deposit all moneys and other valuable effects in
the name and to the credit of the corporation in such depositories as
may be designated by the board of directors.
Section 12. He shall disburse the funds of the corporation
as may be ordered by the board of directors, taking proper vouchers
for such disbursements, and shall render to the president and the
board of directors, at its regular meetings, or when the board of
directors so requires, an account of all his transactions as treasurer
and of the financial condition of the corporation.
Section 13. If required by the board of directors, he shall
give the corporation a bond in such sum and with such surety or
sureties as shall be satisfactory to the board of directors for the
faithful performance of the duties of his office and for the
restoration to the corporation, in case of his
<PAGE>
death, resignation, retirement or removal from office, of all books,
papers, vouchers, money and other property of whatever kind in his
possession or under his control belonging to the corporation.
Section 14. The assistant treasurer, or, if there shall be
more than one, the assistant treasurers in the order determined by the
board of directors, shall, in the absence or disability of the
treasurer, perform the duties and exercise the powers of the treasurer
and shall perform such other duties and have such other powers as the
board of directors may from time to time prescribe.
ARTICLE X
CERTIFICATES FOR SHARES
Section 1. Every holder of shares in the corporation shall
be entitled to have a certificate, signed by, or in the name of the
corporation by, the chairman or vice-chairman of the board of
directors, or the president or a vice-president and the treasurer or
an assistant treasurer, or the secretary or an assistant secretary of
the corporation, certifying the number of shares and the class or
series of shares owned by him in the corporation. If the shares of
the corporation are classified or if any class of shares has two or
more series, there shall appear on the certificate either (1) a
statement of the rights,
<PAGE>
preferences, privileges and restrictions granted to or imposed upon
each class or series of shares to be issued and upon the holders
thereof; or (2) a summary of such rights, preferences, privileges and
restrictions with reference to the provisions of the articles and any
certificates of determination establishing the same; or (3) a
statement setting forth the office or agency of the corporation from
which shareholders may obtain, upon request and without charge, a copy
of the statement referred to in item (1) heretofore. Every
certificate shall have noted thereon any information required to be
set forth by the California General Corporation Law and such
information shall be set forth in the manner provided by such law.
Section 2. Any or all of the signatures on the certificate
may be facsimile. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, it may be issued by the
corporation with the same effect as if such person were an officer,
transfer agent or registrar at the date of issue.
LOST CERTIFICATES
Section 3. The board of directors may direct a new
certificate to be issued in place of any certificate theretofore
<PAGE>
issued by the corporation alleged to have been lost or destroyed. When
authorizing such issue of a new certificate, the board of directors,
in its discretion and as a condition precedent to the issuance
thereof, may prescribe such terms and conditions as it deems
expedient, and may require such indemnities as it deems adequate, to
protect the corporation from any claim that may be made against it
with respect to any such certificate alleged to have been lost or
destroyed.
TRANSFERS OF SHARES
Section 4. Upon surrender to the corporation or the
transfer agent of the corporation of a certificate representing shares
duly endorsed or accompanied by proper evidence of succession,
assignment or authority to transfer, a new certificate shall be issued
to the person entitled thereto, and the old certificate cancelled and
the transaction recorded upon the books of the corporation.
CLOSING OF TRANSFER BOOKS
Section 5. In order that the corporation may determine the
shareholders entitled to notice of any meeting or to vote or entitled
to receive payment of any dividend or other distribution or allotment
of any rights or entitled to exercise any rights in respect of any
other lawful action, the board may fix, in
<PAGE>
advance, a record date, which shall not be more than 60 nor less than
10 days prior to the date of such meeting nor more than 60 days prior
to any other action.
A determination of shareholders of record entitled to notice
of or to vote at a meeting of shareholders shall apply to any
adjournment of the meeting unless the board fixes a new record date
for the adjourned meeting, but the board shall fix a new record date
if the meeting is adjourned for more than 45 days from the date set
for the original meeting.
REGISTERED SHAREHOLDERS
Section 6. The corporation shall be entitled to recognize
the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold
liable for calls and assessments a person registered on its books as
the owner of shares, and shall not be bound to recognize any equitable
or other claim to or interest in such share or shares on the part of
any other person, whether or not it shall have express or other notice
thereof, except as otherwise provided by the laws of California.
<PAGE>
ARTICLE XI
GENERAL PROVISIONS
DIVIDENDS
Section 1. Subject to the provisions of the articles of
incorporation relating thereto, if any, dividends may be declared by
the board of directors at any regular or special meeting, pursuant to
law. Dividends may be paid in cash, in property or in shares of the
capital stock, subject to any provisions of the articles of
incorporation and the California General Corporation Law.
Section 2. Before payment of any dividend, there may be set
aside out of any funds of the corporation available for dividends such
sum or sums as the directors from time to time, in their absolute
discretion, think proper as a reserve fund to meet contingencies, or
for equalizing dividends, or for repairing or maintaining any property
of the corporation, or for such other purpose as the directors shall
think conducive to the interest of the corporation, and the directors
may modify or abolish any such reserve in the manner in which it was
created.
CHECKS
Section 3. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or
<PAGE>
such other person or persons as the board of directors may from time
to time designate.
FISCAL YEAR
Section 4. The fiscal year of the corporation shall be
fixed by resolution of the board of directors.
SEAL
Section 5. The corporate seal shall have inscribed thereon
the name of the corporation, the date of its incorporation and the
words "Corporate Seal, California". The seal may be used by causing
it or a facsimile thereof to be impressed or affixed or in any manner
reproduced.
ARTICLE XII
AMENDMENTS
Section 1. These bylaws may be altered, amended or repealed
or new bylaws may be adopted (a) at any regular or special meeting of
shareholders at which a quorum is present or represented, by the
affirmative vote of a majority of the stock entitled to vote, provided
notice of the proposed alteration, amendment or repeal be contained in
the notice of such meeting, or (b) by the affirmative vote of a
majority of the board of directors at any regular or special meeting
of the board.
<PAGE>
The board of directors shall not make or alter any bylaw
specifying a fixed number of directors or the maximum or minimum
number of directors and the directors shall not change a fixed board
to a variable board or vice versa in the bylaws. The board of
directors shall not change a bylaw, if any, which requires a larger
proportion of the vote of directors for approval than is required by
the California General Corporation Law.
ARTICLE XIII
DIRECTORS' ANNUAL REPORT
Section 1. The directors shall cause to be sent to the
shareholders not later than one hundred twenty days after the close of
the fiscal year, an annual report which shall include a balance sheet
as of the closing date of the last fiscal year, and an income
statement of changes in financial position for said fiscal year. Said
annual report shall be accompanied by any report thereon of
independent accountants or, if there is no such report, the
certificate of an authorized officer of the corporation that such
statements were prepared without audit from the books and records of
the corporation. This annual report is hereby waived whenever the
corporation shall have less than 100 shareholders as defined in
Section 605 of the California Corporations Code. Except when said
waiver applies the annual report
<PAGE>
shall be sent to the shareholder at least 15 (or if sent by third-
class mail, 35) days prior to the date of the annual meeting. The
annual report may be sent by third-class mail only if the corporation
has outstanding shares held by 500 or more persons (as determined by
the provisions of section 605 of the California Corporations Code) on
the record date for the shareholders' meeting. In addition to the
financial statements included in the annual report, the annual report
of the corporation, if it has more than 100 shareholders as defined in
Section 605 of the California Corporations Code and if it has no class
of securities registered under Section 12 of the Securities and
Exchange Act of 1934, or exempt from such registration by Section
12(g) (2) of said act, shall also describe briefly: (1) Any
transaction (excluding compensation of officers and directors) during
the previous fiscal year involving an amount in excess of forty
thousand dollars ($40,000) (other than contracts let at competitive
bids or services rendered at prices regulated by law) to which the
corporation or its parent or subsidiary was a party and in which any
director or officer of the corporation or of a subsidiary or (if known
to the corporation or its parent or subsidiary) any holder of more
than 10 percent of the outstanding voting shares of the corporation
had a direct or indirect material interest, naming such person and
stating such person's relationship to the corporation, the nature of
such person's
<PAGE>
interest in the transaction and, where practicable, the amount of such
interest; provided, that in the case of a transaction with a
partnership of which such person is a partner, only the interest of
the partnership need be stated; and provided, further that no such
report need be made in the case of transactions approved by the
shareholders under subdivision (a) of Section 310 of the California
Corporations Code. (2) The amount and circumstances of any
indemnification or advances aggregating more than ten thousand dollars
($10,000) paid during the fiscal year to any officer or director of
the corporation pursuant to Section 317 of the California Corporations
Code, provided, that no such report need be made in the case of
indemnification approved by the shareholders under paragraph (2) of
subdivision (e) of Section 317 of the California Corporations Code.
NYFS06...:\47\41847\0008\1710\BYLD136K.450
Exhibit 3.2(y)(i)
<PAGE>
BY-LAWS
OF
MONETARY MANAGEMENT OF MARYLAND, INC.
(A MARYLAND CORPORATION)
-----------
ARTICLE I
Shareholders
------------
SECTION 1. Annual Meeting. The annual meeting of share
--------------
holders for the election of directors and for the transaction of such
other business as may properly come before the meeting shall be held
at the office of the Corporation in the State of Maryland or at such
other place within or without the State of Maryland as may be deter-
mined by the Board of Directors and as shall be designated in the
notice of said meeting, on such date and at such time as may be de-
termined by the Board of Directors.
SECTION 2. Special Meetings. Special meetings of the
----------------
shareholders for the transaction of such business as may properly come
before the meeting shall be held at the office of the Corporation in
the State of Maryland, or at such other place within or without the
State of Maryland as may be designated from time to time by the Board
of Directors. Whenever the Board of Directors shall fail to fix such
place, or whenever shareholders entitled to call a special meeting
shall call the same, the meeting shall be held at the office of the
Corporation in the State of Maryland. Special meetings of the
shareholders shall be held upon call of the Board of Directors or of
the President or any Vice-President or the Secretary or any director,
at such time as may be fixed by the Board of Directors or the
President or such Vice-President or the Secretary or such director, as
the case may be, and as shall be stated in the notice of said meeting,
except when the General Corporation Law of the State of Maryland (the
"Business Corporation Law") confers upon the shareholders the right to
demand the call of such meeting and fix the date thereof.
SECTION 3. Notice of Meetings. The notice of all meetings
------------------
of shareholders shall be in writing, shall state the place, date and
hour of the meeting and, unless it is the annual meeting, shall
indicate that it is being issued by or at the
<PAGE>
direction of the person or persons calling the meeting. The notice of
an annual meeting of shareholders shall state that the meeting is
called for the election of directors and for the transaction of such
other business as may properly come before the meeting and shall state
the purpose or purposes of the meeting if any other action is to be
taken at such annual meeting which could be taken at a special
meeting. The notice of a special meeting shall, in all instances,
state the purpose or purposes for which the meeting is called. A copy
of the notice of any meeting shall be served either personally or by
first class mail, in accordance with the provisions of the Business
Corporation Law, to each shareholder at such shareholder's record
address or at such other address as such shareholder may have
furnished by request in writing to the Secretary of the Corporation.
If a meeting is adjourned to another time or place and if any
announcement of the adjourned time or place is made at the meeting, it
shall not be necessary to give notice of the adjourned meeting unless
the Board of Directors, after adjournment, fixes a new record date for
the adjourned meeting. Notice of a meeting need not be given to any
shareholder who submits a signed waiver of notice before or after the
meeting. The attendance of a shareholder at a meeting without
protesting prior to the conclusion of the meeting the lack of notice
of such meeting shall constitute a waiver of notice by such
shareholder.
SECTION 4. Shareholder Lists. A list of shareholders as of
-----------------
the record date, certified by the corporate officer responsible for
its preparation, or by the transfer agent, if any, shall be produced
at any meeting of shareholders upon the request thereat or prior
thereto of any shareholder. If the right to vote at any meeting is
challenged, the inspectors of election, if any, or the person
presiding thereat, shall require such list of shareholders to be
produced as evidence of the right of the persons challenged to vote at
such meeting, and all persons who appear from such list to be
shareholders entitled to vote thereat may vote at such meeting.
SECTION 5. Quorum. Except as otherwise provided by law or
------
the Corporation's Articles of Incorporation, a quorum for the
transaction of business at any meeting of shareholders shall consist
of the holders of record of a majority of the issued and outstanding
shares of the capital stock of the Corporation entitled to vote at the
meeting, present in person or by proxy. At all meetings of the
shareholders at which a quorum is present, all matters, except as
otherwise provided by law, in Section 7 hereunder or in the Articles
of Incorporation, shall be decided by the vote of the holders of a
majority of the shares entitled to vote thereat, that are present in
person or by proxy. If
<PAGE>
there be no such quorum, the holders of a majority of such shares so
present or represented may adjourn the meeting from time to time,
without further notice, until a quorum shall have been obtained. When
a quorum is once present to organize a meeting, it is not broken by
the subsequent withdrawal of any shareholder.
SECTION 6. Organization. Meetings of shareholders shall be
------------
presided over by the Chairman, if any, or if none or in the Chairman's
absence the President, or if none or in the President's absence a
Vice-President, or, if none of the foregoing is present, by a chairman
to be chosen by the shareholders entitled to vote who are present in
person or by proxy at the meeting. The Secretary of the Corporation,
or in the Secretary's absence an Assistant Secretary, shall act as
secretary of every meeting, but if neither the Secretary nor an
Assistant Secretary is present, the presiding officer of the meeting
shall choose any person present to act as secretary of the meeting.
SECTION 7. Voting; Proxies; Required Vote; Ballots. At
---------------------------------------
each meeting of shareholders, every shareholder shall be entitled to
vote in person or by proxy appointed by instrument in writing,
subscribed by such shareholder or by such shareholder's duly
authorized attorney-in-fact, and shall have one vote for each share
entitled to vote and registered in such shareholder's name on the
books of the Corporation on the applicable record date fixed pursuant
to these By-laws. No proxy shall be valid after the expiration of 11
months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the shareholder
executing it, except as otherwise provided by the Business Corporation
Law. At all elections of directors the voting may but need not be by
ballot and a plurality of the votes cast thereat shall elect. Except
as otherwise required by law or the Articles of Incorporation, any
other action shall be authorized by a majority of the votes cast.
SECTION 8. Inspectors. The Board of Directors, in advance
----------
of any meeting, may appoint one or more inspectors to act at the
meeting or any adjournment thereof. If an inspector or inspectors are
not so appointed, the person presiding at the meeting may, and on the
request of any shareholder shall, appoint one or more inspectors. In
case any person appointed fails to appear or act, the vacancy may be
filled by appointment made by the Board of Directors in advance of the
meeting or at the meeting by the person presiding thereat. Each
inspector, if any, before entering upon the discharge of such
inspector's duties, shall take and sign an oath to execute faithfully
the duties of inspector at such meeting with strict impartiality and
according
<PAGE>
to the best of such inspector's ability. The inspectors, if any,
shall determine the number of shares outstanding and the voting power
of each, the shares represented at the meeting, the existence of a
quorum, and the validity and effect of proxies, and shall receive
votes, ballots or consents, hear and determine all challenges and
questions arising in connection with the right to vote, count and
tabulate all votes, ballots or consents, determine the result, and do
such acts as are proper to conduct the election or vote with fairness
to all shareholders. On request of the person presiding at the
meeting or any shareholder, the inspectors shall make a report in
writing of any challenge, question or matter determined by them and
execute a certificate as to any fact found by them.
SECTION 9. Actions Without Meetings. Whenever shareholders
------------------------
are required or permitted to take any action by vote, such action may
be taken without a meeting on written consent, setting forth the
action so taken, signed by the holders of all outstanding shares
entitled to vote thereon.
SECTION 10. Meaning of Certain Terms. As used herein in
------------------------
respect of the right to notice of a meeting of shareholders or a
waiver thereof or to participate or vote thereat or to consent or
dissent in writing in lieu of a meeting, as the case may be, the terms
"share" and "shareholder" or "shareholders" refer to an outstanding
share or shares and to a holder or holders of record of outstanding
shares, respectively, when the Corporation is authorized to issue only
one class of shares, and said references are also intended to include
any outstanding share or shares and any holder or holders of record of
outstanding shares of any class upon which or upon whom the Articles
of Incorporation confers such rights, where there are two or more
classes or series of shares, or upon which or upon whom the Business
Corporation Law confers such rights, notwithstanding that the Articles
of Incorporation may provide for more than one class or series of
shares, one or more of which are limited in or denied such rights
thereunder.
ARTICLE II
Board of Directors
------------------
SECTION 1. General Powers. The business, property and
--------------
affairs of the Corporation shall be managed by or under the direction
of its Board of Directors.
<PAGE>
SECTION 2. Qualification; Number; Term. (a) Each director
---------------------------
shall be at least 18 years of age. A director need not be a
shareholder, a citizen of the United States, or a resident of the
State of Maryland. The number of directors constituting the entire
Board of Directors shall be at least three, except that where all the
shares are owned beneficially and of record by fewer than three
shareholders, the number of directors may be less than three but not
less than the number of shareholders. Subject to the foregoing
limitation and except for the first Board of Directors, such number
may be fixed from time to time by action of the Board of Directors or
of the shareholders, or, if the number of directors is not so fixed,
the number shall be three. The number of directors may be increased
or decreased by action of the Board of Directors or shareholders,
provided that any action of the Board of Directors to effect such
increase or decrease shall require the vote of a majority of the
entire Board of Directors. The use of the phrase "entire Board of
Directors" herein refers to the total number of directors which the
Corporation would have if there were no vacancies.
(b) The first Board of Directors shall be elected by the
incorporator or incorporators of the Corporation and shall hold office
until the first annual meeting of shareholders or until their
respective successors have been elected and qualified. Thereafter,
directors who are elected at an annual meeting of shareholders, and
directors who are elected in the interim to fill vacancies and newly
created directorships, shall hold office until the next annual meeting
of shareholders and until their respective successors have been
elected and qualified. In the interim between annual meetings of
shareholders or special meetings of shareholders called for the
election of directors, newly created directorships and any vacancies
in the Board of Directors, including vacancies resulting from the
removal of directors for cause or without cause, may be filled by the
vote of a majority of the directors then in office, although less than
a quorum exists.
SECTION 3. Quorum and Manner of Voting. A majority of the
---------------------------
entire Board of Directors shall constitute a quorum for the
transaction of business. A majority of the directors present, whether
or not a quorum is present, may adjourn a meeting to another time and
place. Except as herein otherwise provided, the vote of a majority of
the directors present at the time of the vote, at a meeting duly
assembled, a quorum being present at such time, shall be the act of
the Board of Directors.
SECTION 4. Places of Meetings. Meetings of the Board of
------------------
Directors shall be held at such place within or without the
<PAGE>
State of Maryland as may from time to time be determined by the Board
of Directors, or as may be specified in the notice of the meeting.
Regular meetings of the Board of Directors shall be held at such times
and places as may from time to time be fixed by resolution of the
Board of Directors, and special meetings may be held at any time and
place upon the call of the Chairman of the Board, if any, or of the
President or any Vice-President or the Secretary or any director by
oral, telegraphic or notice duly served as set forth in these By-laws.
SECTION 5. Annual Meeting. Following the annual meeting of
--------------
shareholders, the newly elected Board of Directors shall meet for the
purpose of the election of officers and the transaction of such other
business as may properly come before the meeting. Such meeting may be
held without notice immediately after the annual meeting of
shareholders at the same place at which such shareholders' meeting is
held.
SECTION 6. Notice of Meetings. A notice of the place,
------------------
date, time and purpose or purposes of each meeting of the Board of
Directors shall be given to each director by mailing the same at least
two days before the meeting, or by telegraphing or telephoning the
same or by delivering the same personally not later than the day
before the day of the meeting. Notice need not be given of regular
meetings of the Board of Directors. Any requirements of furnishing a
notice shall be waived by any director who signs a waiver of notice
before or after the meeting, or who attends the meeting without
protesting, prior thereto or at its commencement, the lack of notice
to such director. The notice of any meeting need not specify the
purpose of the meeting, and any and all business may be transacted at
such meeting.
SECTION 7. Organization. At all meetings of the Board of
------------
Directors, the Chairman, if any, or if none or in the Chairman's
absence or inability to act the President, or in the President's
absence or inability to act any Vice-President who is a member of the
Board of Directors, or in such Vice-President's absence or inability
to act a chairman chosen by the directors, shall preside. The
Secretary of the Corporation shall act as secretary at all meetings of
the Board of Directors when present, and in the Secretary's absence,
the presiding officer may appoint any person to act as secretary.
SECTION 8. Resignation. Any director may resign at any
-----------
time upon written notice to the Corporation and such resignation shall
take effect upon receipt thereof by the President or Secretary, unless
otherwise specified in the
<PAGE>
resignation. Except as otherwise provided by law or by the Articles
of Incorporation, any or all of the directors may be removed, with or
without cause, by the holders of a majority of the shares of stock
outstanding and entitled to vote for the election of directors.
SECTION 9. Vacancies. Unless otherwise provided in these
---------
By-laws, vacancies among the directors, whether caused by resignation,
death, disqualification, removal, an increase in the authorized number
of directors or otherwise, may be filled by the affirmative vote of a
majority of the remaining directors, although less than a quorum, or
by a sole remaining director, or, at a special meeting of the
shareholders, by the holders of shares entitled to vote for the
election of directors.
SECTION 10. Actions by Written Consent. Any action
--------------------------
required or permitted to be taken by the Board of Directors or by any
committee thereof may be taken without a meeting if all members of the
Board of Directors or of any such committee consent in writing to the
adoption of a resolution authorizing the action and the writing or
writings are filed with the minutes of the proceedings of the Board of
Directors or of any such committee.
SECTION 11. Electronic Communication. Any one or more
------------------------
members of the Board of Directors or any committee thereof may
participate in a meeting of the Board of Directors or any such
committee by means of a conference telephone or similar communications
equipment allowing all persons participating in the meeting to hear
each other at the same time. Participation by such means shall
constitute presence in person at a meeting.
ARTICLE III
Committees of the Board of Directors
------------------------------------
SECTION 1. Appointment. From time to time the Board of
-----------
Directors by a resolution adopted by a majority of the whole Board may
appoint any committee or committees for any purpose or purposes, to
the extent lawful, which shall have powers as shall be determined and
specified by the Board of Directors in the resolution of appointment.
The Board of Directors shall have full power, at any time, to fill
vacancies in, to change membership of, to designate alternate members
of, or to discharge any such committee.
<PAGE>
SECTION 2. Procedures, Quorum and Manner of Acting. Each
---------------------------------------
committee shall fix its own rules of procedure, and shall meet where
and as provided by such rules or by resolution of the Board of
Directors. Except as otherwise provided by law, the presence of a
majority of the then appointed members of a committee shall constitute
a quorum for the transaction of business by that committee, and in
every case where a quorum is present the affirmative vote of a
majority of the members of the committee present shall be the act of
the committee. Each committee shall keep minutes of its proceedings,
and actions taken by a committee shall be reported to the Board of
Directors.
SECTION 3. Action by Written Consent. Any action required
-------------------------
or permitted to be taken at any meeting of any committee of the Board
may be taken without a meeting if all the members of the committee
consent thereto in writing, and the writing or writings are filed with
the minutes of proceedings of the committee.
SECTION 4. Term; Termination. In the event any person
-----------------
shall cease to be a director of the Corporation, such person shall
simultaneously therewith cease to be a member of any committee
appointed by the Board of Directors.
ARTICLE IV
Officers
--------
SECTION 1. Election and Qualifications. The Board of
---------------------------
Directors shall elect the officers of the Corporation, which shall
include a President and a Secretary, and may include, by election or
appointment, one or more Vice-Presidents (any one or more of whom may
be given an additional designation of rank or function), a Treasurer
and such other officers as the Board may from time to time deem
proper. Each officer shall have such powers and duties as may be
prescribed by these By-laws and as may be assigned by the Board of
Directors or the President. Any two or more offices may be held by
the same person. When all of the issued and outstanding stock of the
Corporation is owned by one person, such person may hold all or any
combination of offices.
SECTION 2. Term of Office and Remuneration. The term of
-------------------------------
office of all officers shall be one year and until their respective
successors have been elected and qualified, but any officer may be
removed from office, either with or without cause, at any time by the
Board of Directors. Any vacancy in any office
<PAGE>
arising from any cause may be filled for the unexpired portion of the
term by the Board of Directors.
SECTION 3. Resignation; Removal. Any officer may resign at
--------------------
any time upon written notice to the Corporation and such resignation
shall take effect upon receipt thereof by the President or Secretary,
unless otherwise specified in the resignation. Any officer shall be
subject to removal, with or without cause, at any time by vote of a
majority of the whole Board.
SECTION 4. Chairman of the Board. The Chairman of the
---------------------
Board of Directors, if there be one, shall preside at all meetings of
the Board of Directors and shall have such other powers and duties as
may from time to time be assigned by the Board of Directors.
SECTION 5. President. The President shall be the Chief
---------
Executive Officer of the Corporation and shall have general management
and supervision of the property, business and affairs of the Corpora-
tion and over its other officers. The President shall preside at all
meetings of the shareholders and, in the absence or disability of the
Chairman of the Board of Directors, or if there be no Chairman, shall
preside at all meetings of the Board of Directors. The President may
execute and deliver in the name of the Corporation powers of attorney,
contracts, bonds and other obligations and instruments, except in
cases where the signing and execution thereof shall be expressly
delegated by the Board of Directors, or by these By-laws, to some
other officer or agent of the Corporation.
SECTION 6. Vice-President. A Vice-President may execute
--------------
and deliver in the name of the Corporation contracts and other
obligations and instruments pertaining to the regular course of such
Vice-President's duties, and shall have such other authority as from
time to time may be assigned by the Board of Directors or the
President.
SECTION 7. Treasurer. The Treasurer shall in general have
---------
all duties incident to the position of Treasurer and such other duties
as may be assigned by the Board of Directors or the President.
SECTION 8. Secretary. The Secretary shall in general have
---------
all the duties incident to the office of Secretary and such other
duties as may be assigned by the Board of Directors or the President.
<PAGE>
SECTION 9. Assistant Officers. Any assistant officer shall
------------------
have such powers and duties of the officer such assistant officer
assists as such officer or the Board of Directors shall from time to
time prescribe.
ARTICLE V
Books and Records
-----------------
SECTION 1. Location. The Corporation shall keep correct
--------
and complete books and records of account and shall keep minutes of
the proceedings of the shareholders, of the Board of Directors, and/or
of any committee which the Board of Directors may appoint, and shall
keep at the office of the Corporation in or outside the State of
Maryland or at the office of the transfer agent or registrar, if any,
a record containing the names and addresses of all shareholders, the
number and class of shares held by each, and the dates when such
shareholders respectively became the owners of record thereof. Any of
the foregoing books, minutes or records may be in written form or in
any other form capable of being converted into written form within a
reasonable time.
SECTION 2. Addresses of Shareholders. Notices of meetings
-------------------------
and all other corporate notices may be delivered personally or mailed
to each shareholder at said shareholder's address as it appears on the
records of the Corporation.
SECTION 3. Fixing Date for Determination of Shareholders of
------------------------------------------------
Record. For the purpose of determining the shareholders entitled to
------
notice of or to vote at any meeting of shareholders or any adjournment
thereof, or to express to consent to or dissent from any proposal
without a meeting, or for the purpose of determining shareholders
entitled to receive payment of any dividend or the allotment of any
rights, or for the purpose of any other action, the Board of Directors
may fix, in advance, a record date, in accordance with the provisions
of the Business Corporation Law. If no record date is fixed, the
record date for determining shareholders entitled to notice of or to
vote at a meeting of shareholders shall be at the close of business on
the day next preceding the day on which notice is given, or, if notice
is waived, at the close of business on the day next preceding the day
on which the meeting is held. The record date for determining
shareholders for any purpose other than that specified in the
preceding sentence shall be at the close of business on the day on
which the Board of Directors adopts the resolution relating thereto.
A determination of
<PAGE>
shareholders of record entitled to notice of or to vote at a meeting
of shareholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
ARTICLE VI
Certificates Representing Shares
--------------------------------
SECTION 1. Certificates; Signatures. (a) The shares of
------------------------
the Corporation shall be represented by certificates representing
shares, in such form as the Board of Directors may from time to time
prescribe, or shall be uncertificated shares. Certificates
representing shares shall have set forth thereon the statements
prescribed by law and shall be signed by the Chairman of the Board or
the President or a Vice-President and by the Secretary or an Assistant
Secretary or a Treasurer or an Assistant Treasurer and may be sealed
with the corporate seal or a facsimile thereof. Any and all
signatures on any such certif-icate may be facsimiles if the
certificate is countersigned by a transfer agent or registered by a
registrar other than the Corporation itself or its employee, or the
shares are listed on a registered national securities exchange. In
case any officer who has signed or whose facsimile signature has been
placed upon a certificate shall have ceased to be such officer before
such certificate is issued, it may be issued by the Corporation with
the same effect as if such officer were an officer at the date of its
issue.
(b) Each certificate representing shares issued by the
Corporation, if the Corporation is authorized to issue shares of more
than one class, shall set forth upon the face or back of the
certificate, or shall state that the Corporation will furnish to any
shareholder upon request and without charge, a full statement of the
designation, relative rights, preferences and limitations of the
shares of each class authorized to be issued and, if the Corporation
is authorized to issue any class of preferred shares in series, the
designation, relative rights, preferences and limitations of each such
series so far as the same have been fixed and the authority of the
Board of Directors to designate and fix the relative rights,
preferences and limitations of other series.
(c) Each certificate representing shares shall state upon
the face thereof:
<PAGE>
(1) That the Corporation is formed under the laws of the
State of Maryland;
(2) The name of the person or persons to whom issued;
(3) The number and class of shares, and the designation of
the series, if any, which such certificate represents;
and
(4) The name of the Corporation.
(d) The name of the holder of record of the shares
represented thereby, with the number of shares and the date of issue,
shall be entered on the books of the Corporation.
SECTION 2. Transfer of Shares. Upon compliance with
------------------
provisions governing or restricting the transferability of shares, if
any, transfers of shares of the Corporation shall be made only on the
share record of the Corporation by the registered holder thereof, or
by such holder's attorney-in-fact thereunto authorized by power of
attorney duly executed and filed with the Secretary of the Corporation
or with a transfer agent or a registrar, if any, and upon the
surrender of the certificate or certificates for such shares properly
endorsed and the payment of all taxes due thereon, if any. A
certificate representing shares shall not be issued until the full
amount of consideration therefor has been paid, except as the Business
Corporation Law may otherwise permit.
SECTION 3. Fractional Shares. The Corporation may, but
-----------------
shall not be required to, issue certificates for fractions of a share
where necessary to effect transactions authorized by the Business
Corporation Law, which shall entitle the holder, in proportion to such
holder's fractional holdings, to exercise voting rights, receive divi-
dends and participate in liquidating distributions; or the Corporation
may pay in cash the fair value of fractions of a share as of the time
when those entitled to receive such fractions are determined; or it
may issue scrip in registered or bearer form over the manual or
facsimile signature of an officer of the Corporation or of its agent,
exchangeable as therein provided for full shares, but such scrip shall
not entitle the holder to any rights of a shareholder except as
therein provided. The Board of Directors shall have power and
authority to make all such rules and regulations as it may deem
expedient concerning the issue, transfer and registration of
certificates representing shares of the Corporation.
<PAGE>
SECTION 4. Lost, Stolen or Destroyed Certificates. The
--------------------------------------
Corporation may issue a new certificate of stock in place of any
certificate, theretofore issued by it, alleged to have been lost,
stolen or destroyed, and the Board of Directors may require the owner
of any lost, stolen or destroyed certificate, or his legal
representative, to give the Corporation a bond sufficient to indemnify
the Corporation against any claim that may be made against it on ac-
count of the alleged loss, theft or destruction of any such certi-
ficate or the issuance of any such new certificate.
ARTICLE VII
Dividends
---------
Subject always to the provisions of law and the Articles of
Incorporation, the Board of Directors shall have full power to
determine whether any, and, if any, what part of any, funds legally
available for the payment of dividends shall be declared as dividends
and paid to shareholders; the division of the whole or any part of
such funds of the Corporation shall rest wholly within the lawful dis-
cretion of the Board of Directors, and it shall not be required at any
time, against such discretion, to divide or pay any part of such funds
among or to the shareholders as dividends or otherwise; and before
payment of any dividend, there may be set aside out of any funds of
the Corporation available for dividends such sum or sums as the Board
of Directors from time to time, in its absolute discretion, thinks
proper as a reserve or reserves to meet contingencies, or for equal-
izing dividends, or for repairing or maintaining any property of the
Corporation, or for such other purpose as the Board of Directors shall
think conducive to the interest of the Corporation, and the Board of
Directors may modify or abolish any such reserve in the manner in
which it was created.
ARTICLE VIII
Ratification
------------
Any transaction, questioned in any law suit on the ground of
lack of authority, defective or irregular execution, adverse interest
of director, officer or shareholder, non-disclosure, miscomputation,
or the application of improper principles or practices of accounting,
may be ratified, before or after judgment, by the Board of Directors
or by the shareholders and if so ratified shall have the same force
and effect as if the
<PAGE>
questioned transaction had been originally duly authorized. Such
ratification shall be binding upon the Corporation and its
shareholders and shall constitute a bar to any claim or execution of
any judgment in respect of such questioned transaction.
ARTICLE IX
Corporate Seal
--------------
The corporate seal shall have inscribed thereon the name of
the Corporation and the year of its incorporation, and shall be in
such form and contain such other words and/or figures as the Board of
Directors shall determine. The corporate seal may be used by
printing, engraving, lithographing, stamping or otherwise making,
placing or affixing, or causing to be printed, engraved, lithographed,
stamped or otherwise made, placed or affixed, upon any paper or
document, by any process whatsoever, an impression, facsimile or other
reproduction of said corporate seal.
ARTICLE X
Fiscal Year
-----------
The fiscal year of the Corporation shall be fixed, and shall
be subject to change, by the Board of Directors. Unless otherwise
fixed by the Board of Directors, the fiscal year of the Corporation
shall be the calendar year.
ARTICLE XI
Waiver of Notice
----------------
Whenever notice is required to be given by these By-laws or
by the Articles of Incorporation or by law, a written waiver thereof,
signed by the person or persons entitled to said notice, whether
before or after the time stated therein, shall be deemed equivalent to
notice.
<PAGE>
ARTICLE XII
Indemnification
---------------
SECTION 1. General Scope. The Corporation, to the fullest
-------------
extent permitted and in the manner required by the laws of the State
of Maryland as in effect at the time of the adoption of this Article
XII or as the law may be amended from time to time, shall, except as
set forth in Article XII, Section 2 below, (i) indemnify any officer
or director of the Corporation, or any other person designated by the
Board of Directors as being entitled to indemnification (and the heirs
and legal representatives of such person) made, or threatened to be
made, a party in an action or proceeding (including, without limita-
tion, one by or in the right of the Corporation to procure a judgment
in its favor), whether civil or criminal, including an action by or in
the right of any other corporation of any type or kind, domestic or
foreign, or any partnership, joint venture, trust, employee benefit
plan or other enterprise, which any indemnified representative served
in any capacity at the request of the Corporation, by reason of the
fact that such indemnified person, or such indemnified person's
testator or intestate, was a director or officer of the Corporation or
served such other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise in any capacity, and (ii)
provide to any such indemnified person (and the heirs and legal
representatives of such person) advances for expenses incurred in
pursuing such action or proceeding, upon receipt of an undertaking by
or on behalf of such indemnified person to repay such amount as, and
to the extent, required by the Business Corporation Law.
SECTION 2. Limitations on Indemnification. The Corporation
------------------------------
shall not indemnify any indemnified representative: (a) where such
indemnification is expressly prohibited by applicable law; (b) where
the conduct of the indemnified representative has been finally
determined (i) to constitute willful misconduct or recklessness or
(ii) to be based upon or attributable to the receipt by the
indemnified representative of a personal benefit from the Corporation
to which the indemnified representative is not legally entitled; or
(c) to the extent such indemnification has been determined to be
otherwise unlawful.
SECTION 3. Indemnification Not Exclusive. The rights
-----------------------------
granted by this Article shall not be deemed exclusive of any other
rights to which those seeking indemnification may be entitled under
any statute, agreement, vote of shareholders or disinterested
directors or otherwise. The indemnification
<PAGE>
provided by or granted pursuant to this Article shall continue as to a
person who has ceased to be an indemnified representative in respect
of matters arising prior to such time, and shall inure to the benefit
of the heirs, executors, administrators and personal representatives
of such a person.
SECTION 4. Contract Rights; Amendment or Repeal. All
------------------------------------
rights under this Article shall be deemed a contract between the
Corporation and the indemnified representative pursuant to which the
Corporation and each indemnified representative intend to be legally
bound. Any repeal, amendment or modification hereof shall be
prospective only and shall not affect any rights or obligations then
existing.
ARTICLE XIII
Bank Accounts, Drafts, Contracts, Etc.
--------------------------------------
SECTION 1. Bank Accounts and Drafts. In addition to such
------------------------
bank accounts as may be authorized by the Board of Directors, the
Treasurer or any person designated by the Treasurer, whether or not an
employee of the Corporation, may authorize such bank accounts to be
opened or maintained in the name and on behalf of the Corporation as
such person may deem necessary or appropriate, and may authorize pay-
ments from such bank accounts to be made upon and according to the
check of the Corporation in accordance with the written instructions
of the Treasurer, or other person so designated by the Treasurer.
SECTION 2. Contracts. The Board of Directors may authorize
---------
any person or persons, in the name and on behalf of the Corporation,
to enter into or execute and deliver any and all deeds, bonds,
mortgages, contracts and other obligations or instruments, and such
authority may be general or confined to specific instances.
SECTION 3. Proxies; Powers of Attorney; Other Instruments.
----------------------------------------------
The Chairman, the President or any other person designated by either
of them shall have the power and authority to execute and deliver
proxies, powers of attorney and other instruments on behalf of the
Corporation in connection with the rights and powers incident to the
ownership of stock by the Corporation. The Chairman, the President or
any other person authorized by proxy or power of attorney executed and
delivered by either of them on behalf of the Corporation may attend
and vote at any meeting of shareholders of any company in which the
Corporation may hold stock, and may exercise on behalf of the
<PAGE>
Corporation any and all of the rights and powers incident to the
ownership of such stock at any such meeting, or otherwise as specified
in the proxy or power of attorney so authorizing any such person. The
Board of Directors, from time to time, may confer like powers upon any
other person.
SECTION 4. Financial Reports. The directors may appoint
-----------------
the Treasurer or other fiscal officer and/or the Secretary or any
other officer to cause to be prepared and furnished to shareholders
entitled thereto any special financial notice and/or financial
statement, as the case may be, which may be required by any provision
of law.
ARTICLE XIV
Amendments
----------
The shareholders entitled to vote in the election of
directors may amend or repeal the By-laws and may adopt new By-laws.
Except as otherwise required by law or by the provisions of these
By-laws, the Board of Directors may also amend or repeal the By-laws
and adopt new By-laws, but By-laws adopted by the Board of Directors
may be amended or repealed by the said shareholders. Any change in
the By-laws shall take effect when adopted unless otherwise provided
for in the resolution effecting the change.
NYFS06...:\47\41847\0008\1710\BYLD126L.270
Exhibit 3.2(z)(i)
<PAGE>
MONETARY MANAGEMENT OF NEW YORK, INC.
* * * * *
BY-LAWS
* * * * *
ARTICLE I
OFFICES
Section 1. The office of the corporation shall be located
in the County of New York, State of New York.
Section 2. The corporation may also have offices at such
other places both within and without the State of New York as the
board of directors may from time to time determine or the business of
the corporation may require.
ARTICLE II
ANNUAL MEETINGS OF SHAREHOLDERS
Section 1. All meetings of shareholders for the election of
directors shall be held in the City of New York, State of New York, at
such place as may be fixed from time to time by the board of
directors.
Section 2. Annual meetings of shareholders, commencing with
the year 1988, shall be held on the second Tuesday of May if not a
legal holiday, and if a legal holiday, then on the next
<PAGE>
secular day following, at 11:00 A.M., at which they shall elect by a
plurality vote, a board of directors, and transact such other business
as may properly be brought before the meeting.
Section 3. Written or printed notice of the annual meeting
stating the place, date and hour of the meeting shall be delivered not
less than ten nor more than fifty days before the date of the meeting,
either personally or by mail, by or at the direction of the president,
the secretary, or the officer or persons calling the meeting, to each
shareholder of record entitled to vote at such meeting.
ARTICLE III
SPECIAL MEETINGS OF SHAREHOLDERS
Section 1. Special meetings of shareholders may be held at
such time and place within or without the State of New York as shall
be stated in the notice of the meeting or in a duly executed waiver of
notice thereof.
Section 2. Special meetings of the shareholders, for any
purpose or purposes, unless otherwise prescribed by statute or by the
certificate of incorporation, may be called by the president, the
board of directors, or the holders of not less than fifty percent of
all the shares entitled to vote at the meeting.
Section 3. Written or printed notice of a special meeting
stating the place, date and hour of the meeting and the
<PAGE>
purpose or purposes for which the meeting is called, shall be
delivered not less than ten nor more than fifty days before the date
of the meeting, either personally or by mail, by, or at the direction
of, the president, the secretary, or the officer or persons calling
the meeting, to each shareholder of record entitled to vote at such
meeting. The notice should also indicate that it is being issued by,
or at the direction of, the person calling the meeting.
Section 4. The business transacted at any special meeting
of shareholders shall be limited to the purposes stated in the notice.
ARTICLE IV
QUORUM AND VOTING OF STOCK
Section 1. A majority of the shareholders, holding shares
of stock issued and outstanding and entitled to vote, represented in
person or by proxy, shall constitute a quorum at all meetings of the
shareholders for the transaction of business except as otherwise
provided by statute or by the certificate of incorporation. If,
however, such quorum shall not be present or represented at any
meeting of the shareholders, the shareholders present in person or
represented by proxy shall have power to adjourn the meeting from time
to time, without notice other than announcement at the meeting, until
a quorum shall be present or represented. At such adjourned meeting
at which a quorum shall
<PAGE>
be present or represented any business may be transacted which might
have been transacted at the meeting as originally notified.
Section 2. If a quorum is present, the affirmative vote of
a majority of the shares of stock represented at the meeting shall be
the act of the shareholders, unless the vote of a greater or lesser
number of shares of stock is required by law or the certificate of
incorporation.
Section 3. Each outstanding share of stock having voting
power shall be entitled to one vote on each matter submitted to a vote
at a meeting of shareholders. A shareholder may vote either in person
or by proxy executed in writing by the shareholder or by his duly
authorized attorney-in-fact.
Section 4. The board of directors in advance of any
shareholders' meeting may appoint one or more inspectors to act at the
meeting or any adjournment thereof. If inspectors are not so
appointed, the person presiding at a shareholders' meeting may, and,
on the request of any shareholder entitled to vote thereat, shall
appoint one or more inspectors. In case any person appointed as
inspector fails to appear or act, the vacancy may be filled by the
board in advance of the meeting or at the meeting by the person
presiding thereat. Each inspector, before entering upon the discharge
of his duties, shall take and sign an oath faithfully to execute the
duties of inspector at such meeting with strict impartiality and
according to the best of his ability.
<PAGE>
Section 5. Whenever shareholders are required or permitted
to take any action by vote, such action may be taken without a meeting
on written consent, setting forth the action so taken, signed by the
holders of all outstanding shares entitled to vote thereon.
ARTICLE V
DIRECTORS
Section 1. The number of directors shall be three.
Directors shall be at least eighteen years of age and need not be
residents of the State of New York nor shareholders of the
corporation. The directors, other than the first board of directors,
shall be elected at the annual meeting of the shareholders, except as
hereinafter provided, and each director elected shall serve until the
next succeeding annual meeting and until his successor shall have been
elected and qualified. The first board of directors shall hold office
until the first annual meeting of shareholders.
Section 2. Any or all of the directors may be removed, with
or without cause, at any time by the vote of the shareholders at a
special meeting called for that purpose.
Any director may be removed for cause by the action of the
directors at a special meeting called for that purpose.
Section 3. Unless otherwise provided in the certificate of
incorporation, newly created directorships resulting from an increase
in the board of directors and all
<PAGE>
vacancies occurring in the board of directors, including vacancies
caused by removal without cause, may be filled by the affirmative vote
of a majority of the board of directors, however, if the number of
directors then in office is less than a quorum then such newly created
directorships and vacancies may be filled by a vote of a majority of
the directors then in office. A director elected to fill a vacancy
shall hold office until the next meeting of shareholders at which
election of directors is the regular order of business, and until his
successor shall have been elected and qualified. A director elected
to fill a newly created directorship shall serve until the next
succeeding annual meeting of shareholders and until his successor
shall have been elected and qualified.
Section 4. The business affairs of the corporation shall be
managed by its board of directors which may exercise all such powers
of the corporation and do all such lawful acts and things as are not
by statute or by the certificate of incorporation or by these by-laws
directed or required to be exercised or done by the shareholders.
Section 5. The directors may keep the books of the
corporation, except such as are required by law to be kept within the
state, outside the State of New York, at such place or places as they
may from time to time determine.
Section 6. The board of directors, by the affirmative vote
of a majority of the directors then in office, and
<PAGE>
irrespective of any personal interest of any of its members, shall
have authority to establish reasonable compensation of all directors
for services to the corporation as directors, officers or otherwise.
ARTICLE VI
MEETINGS OF THE BOARD OF DIRECTORS
Section 1. Meetings of the board of directors, regular or
special, may be held either within or without the State of New York.
Section 2. The first meeting of each newly elected board of
directors shall be held at such time and place as shall be fixed by
the vote of the shareholders at the annual meeting and no notice of
such meeting shall be necessary to the newly elected directors in
order legally to constitute the meeting, provided a quorum shall be
present, or it may convene at such place and time as shall be fixed by
the consent in writing of all the directors.
Section 3. Regular meetings of the board of directors may
be held upon such notice, or without notice, and at such time and at
such place as shall from time to time be determined by the board.
Section 4. Special meetings of the board of directors may
be called by the president on one day's notice to each director,
either personally or by mail or by telegram; special meetings shall be
called by the president or secretary in like
<PAGE>
manner and on like notice on the written request of two directors.
Section 5. Notice of a meeting need not be given to any
director who submits a signed waiver of notice whether before or after
the meeting, or who attends the meeting without protesting, prior
thereto or at its commencement, the lack of notice. Neither the
business to be transacted at, nor the purpose of, any regular or
special meeting of the board of directors need be specified in the
notice or waiver of notice of such meeting.
Section 6. A majority of the directors shall constitute a
quorum for the transaction of business unless a greater or lesser
number is required by law or by the certificate of incorporation. The
vote of a majority of the directors present at any meeting at which a
quorum is present shall be the act of the board of directors, unless
the vote of a greater number is required by law or by the certificate
of incorporation. If a quorum shall not be present at any meeting of
directors, the directors present may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a
quorum shall be present.
Section 7. Unless otherwise restricted by the certificate
of incorporation or these by-laws, members of the board of directors,
or any committee designated by the board of directors, may participate
in a meeting of the board of
<PAGE>
directors, or any committee, by means of conference telephone or
similar communications equipment by means of which all persons
participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at the
meeting.
Section 8. Unless the certificate of incorporation provides
otherwise, any action required or permitted to be taken at a meeting
of the directors or a committee thereof may be taken without a meeting
if a consent in writing to the adoption of a resolution authorizing
the action so taken, shall be signed by all of the directors entitled
to vote with respect to the subject matter thereof.
ARTICLE VII
EXECUTIVE COMMITTEE
Section 1. The board of directors, by resolution adopted by
a majority of the entire board, may designate, from among its members,
an executive committee and other committees, each consisting of three
or more directors, and each of which, to the extent provided in the
resolution, shall have all the authority of the board, except as
otherwise required by law. Vacancies in the membership of the
committee shall be filled by the board of directors at a regular or
special meeting of the board of directors. The executive committee
shall keep regular
<PAGE>
minutes of its proceedings and report the same to the board when
required.
ARTICLE VIII
NOTICES
Section 1. Whenever, under the provisions of the statutes
or of the certificate of incorporation or of these by-laws, notice is
required to be given to any director or shareholder, it shall not be
construed to mean personal notice, but such notice may be given in
writing, by mail, addressed to such director or shareholder, at his
address as it appears on the records of the corporation, with postage
thereon prepaid, and such notice shall be deemed to be given at the
time when the same shall be deposited in the United States mail.
Notice to directors may also be given by telegram.
Section 2. Whenever any notice of a meeting is required to
be given under the provisions of the statutes or under the provisions
of the certificate of incorporation or these by-laws, a waiver thereof
in writing signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice.
<PAGE>
ARTICLE IX
OFFICERS
Section 1. The officers of the corporation shall be chosen
by the board of directors and shall be a president, a vice-president,
a secretary and a treasurer. The board of directors may also choose
additional vice-presidents, and one or more assistant secretaries and
assistant treasurers.
Section 2. The board of directors at its first meeting
after each annual meeting of shareholders shall choose a president,
one or more vice-presidents, a secretary and a treasurer, none of whom
need be a member of the board.
Any two or more offices may be held by the same person,
except the offices of president and secretary. When all the issued
and outstanding stock of the corporation is owned by one person, such
person may hold all or any combination of offices.
Section 3. The board of directors may appoint such other
officers and agents as it shall deem necessary who shall hold their
offices for such terms and shall exercise such powers and perform such
duties as shall be determined from time to time by the board of
directors.
Section 4. The salaries of all officers and agents of the
corporation shall be fixed by the board of directors.
Section 5. The officers of the corporation shall hold
office until their successors are chosen and qualify. Any officer
elected or appointed by the board of directors may be
<PAGE>
removed at any time by the affirmative vote of a majority of the board
of directors. Any vacancy occurring in any office of the corporation
shall be filled by the board of directors.
THE PRESIDENT
Section 6. The president shall be the chief executive
officer of the corporation, shall preside at all meetings of the
shareholders and the board of directors, shall have general and active
management of the business of the corporation and shall see that all
orders and resolutions of the board of directors are carried into
effect.
Section 7. He shall execute bonds, mortgages and other
contracts requiring a seal under the seal of the corporation, except
where required or permitted by law to be otherwise signed and executed
and except where the signing and execution thereof shall be expressly
delegated by the board of directors to some other officer or agent of
the corporation.
THE VICE-PRESIDENTS
Section 8. The vice-president or, if there shall be more
than one, the vice-presidents in the order determined by the board of
directors, shall, in the absence or disability of the president,
perform the duties and exercise the powers of the president and shall
perform such other duties and have such other powers as the board of
directors may from time to time prescribe.
<PAGE>
THE SECRETARY AND ASSISTANT SECRETARIES
Section 9. The secretary shall attend all meetings of the
board of directors and all meetings of the shareholders and record all
the proceedings of the meetings of the corporation and of the board of
directors in a book to be kept for that purpose and shall perform like
duties for the standing committees when required. He shall give, or
cause to be given, notice of all meetings of the shareholders and
special meetings of the board of directors, and shall perform such
other duties as may be prescribed by the board of directors or
president, under whose supervision he shall be. He shall have custody
of the corporate seal of the corporation and he, or an assistant
secretary, shall have authority to affix the same to any instrument
requiring it and, when so affixed, it may be attested by his signature
or by the signature of such assistant secretary. The board of
directors may give general authority to any other officer to affix the
seal of the corporation and to attest the affixing by his signature.
Section 10. The assistant secretary or, if there be more
than one, the assistant secretaries in the order determined by the
board of directors, shall, in the absence or disability of the
secretary, perform the duties and exercise the powers of the secretary
and shall perform such other duties and have such other powers as the
board of directors may from time to time prescribe.
<PAGE>
THE TREASURER AND ASSISTANT TREASURERS
Section 11. The treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the
corporation and shall deposit all moneys and other valuable effects in
the name and to the credit of the corporation in such depositories as
may be designated by the board of directors.
Section 12. He shall disburse the funds of the corporation
as may be ordered by the board of directors, taking proper vouchers
for such disbursements, and shall render to the president and the
board of directors at its regular meetings, or when the board of
directors so requires, an account of all his transactions as treasurer
and of the financial condition of the corporation.
Section 13. If required by the board of directors, he shall
give the corporation a bond in such sum and with such surety or
sureties as shall be satisfactory to the board of directors for the
faithful performance of the duties of his office and for the
restoration to the corporation, in case of his death, resignation,
retirement or removal from office, of all books, papers, vouchers,
money and other property of whatever kind in his possession or under
his control belonging to the corporation.
<PAGE>
Section 14. The assistant treasurer, or, if there shall be
more than one, the assistant treasurers in the order determined by the
board of directors, shall, in the absence or disability of the
treasurer, perform the duties and exercise the powers of the treasurer
and shall perform such other duties and have such other powers as the
board of directors may from time to time prescribe.
ARTICLE X
CERTIFICATES FOR SHARES
Section 1. The shares of the corporation shall be
represented by certificates or shall be uncertified. Certificates
shall be signed by the chairman or vice-chairman of the board or the
president or a vice-president and the secretary or an assistant
secretary or the treasurer or an assistant treasurer of the
corporation and may be sealed with the seal of the corporation or a
facsimile thereof.
When the corporation is authorized to issue shares of more
than one class there shall be set forth upon the face or back of the
certificate, or the certificate shall have a statement that the
corporation will furnish to any shareholder upon request and without
charge, a full statement of the designation, relative rights,
preferences, and limitations of the shares of each class authorized to
be issued and, if the corporation is authorized to issue any class of
preferred shares
<PAGE>
in series, the designation, relative rights, preferences and
limitations of each such series so far as the same have been fixed and
the authority of the board of directors to designate and fix the
relative rights, preferences and limitations of other series.
Within a reasonable time after the issuance or transfer of
any uncertificated shares there shall be sent to the registered owner
thereof a written notice containing the information required to be set
forth or stated on certificates pursuant to paragraphs (b) and (c) of
Section 508 of the New York Business Corporation Law.
Section 2. The signatures of the officers of the
corporation upon a certificate may be facsimiles if the certificate is
countersigned by a transfer agent or registered by a registrar other
than the corporation itself or an employee of the corporation. In
case any officer who has signed or whose facsimile signature has been
placed upon a certificate shall have ceased to be such officer before
such certificate is issued, it may be issued by the corporation with
the same effect as if he were such officer at the date of issue.
LOST CERTIFICATES
Section 3. The board of directors may direct a new
certificate to be issued in place of any certificate theretofore
issued by the corporation alleged to have been lost or destroyed.
<PAGE>
When authorizing such issue of a new certificate, the board of
directors, in its discretion and as a condition precedent to the
issuance thereof, may prescribe such terms and conditions as it deems
expedient, and may require such indemnities as it deems adequate, to
protect the corporation from any claim that may be made against it
with respect to any such certificate alleged to have been lost or
destroyed.
TRANSFERS OF SHARES
Section 4. Upon surrender to the corporation or the
transfer agent of the corporation of a certificate representing shares
duly endorsed or accompanied by proper evidence of succession,
assignment or authority to transfer, a new certificate shall be issued
to the person entitled thereto, and the old certificate cancelled and
the transaction recorded upon the books of the corporation.
FIXING RECORD DATE
Section 5. For the purpose of determining shareholders
entitled to notice of or to vote at any meeting of shareholders or any
adjournment thereof, or to express consent to or dissent from any
proposal without a meeting, or for the purpose of determining
shareholders entitled to receive payment of any dividend or the
allotment of any rights, or for the purpose of any other action, the
board of directors may fix, in advance, a
<PAGE>
date as the record date for any such determination of shareholders.
Such date shall not be more than fifty nor less than ten days before
the date of any meeting nor more than fifty days prior to any other
action. When a determination of shareholders of record entitled to
notice of or to vote at any meeting of shareholders has been made as
provided in this section, such determination shall apply to any
adjournment thereof, unless the board fixes a new record date for the
adjourned meeting.
REGISTERED SHAREHOLDERS
Section 6. The corporation shall be entitled to recognize
the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold
liable for calls and assessments a person registered on its books as
the owner of shares, and shall not be bound to recognize any equitable
or other claim to or interest in such share or shares on the part of
any other person, whether or not it shall have express or other notice
thereof, except as otherwise provided by the laws of New York.
LIST OF SHAREHOLDERS
Section 7. A list of shareholders as of the record date,
certified by the corporate officer responsible for its preparation or
by a transfer agent, shall be produced at any
<PAGE>
meeting upon the request thereat or prior thereto of any shareholder.
If the right to vote at any meeting is challenged, the inspectors of
election, or person presiding thereat, shall require such list of
shareholders to be produced as evidence of the right of the persons
challenged to vote at such meeting and all persons who appear from
such list to be shareholders entitled to vote thereat may vote at such
meeting.
ARTICLE XI
GENERAL PROVISIONS
DIVIDENDS
Section 1. Subject to the provisions of the certificate of
incorporation relating thereto, if any, dividends may be declared by
the board of directors at any regular or special meeting, pursuant to
law. Dividends may be paid in cash, in shares of the capital stock or
in the corporation's bonds or its property, including the shares or
bonds of other corporations subject to any provisions of law and of
the certificate of incorporation.
Section 2. Before payment of any dividend, there may be set
aside out of any funds of the corporation available for dividends such
sum or sums as the directors from time to time, in their absolute
discretion, think proper as a reserve fund to meet contingencies, or
for equalizing dividends, or for repairing or maintaining any property
of the corporation, or for such other
<PAGE>
purpose as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve
in the manner in which it was created.
CHECKS
Section 3. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other
person or persons as the board of directors may from time to time
designate.
FISCAL YEAR
Section 4. The fiscal year of the corporation shall be
fixed by resolution of the board of directors.
SEAL
Section 5. The corporate seal shall have inscribed thereon
the name of the corporation, the year of its organization and the
words "Corporate Seal, New York". The seal may be used by causing it
or a facsimile thereof to be impressed or affixed or in any manner
reproduced.
ARTICLE XII
AMENDMENTS
Section 1. These by-laws may be amended or repealed or new
by-laws may be adopted at any regular or special meeting of
<PAGE>
shareholders at which a quorum is present or represented, by the vote
of the holders of shares entitled to vote in the election of any
directors, provided notice of the proposed alteration, amendment or
repeal be contained in the notice of such meeting. These by-laws may
also be amended or repealed or new by-laws may be adopted by the
affirmative vote of a majority of the board of directors at any
regular or special meeting of the board. If any by-law regulating an
impending election of directors is adopted, amended or repealed by the
board, there shall be set forth in the notice of the next meeting of
shareholders for the election of directors the by-law so adopted,
amended or repealed, together with precise statement of the changes
made. By-laws adopted by the board of directors may be amended or
repealed by the shareholders.
NYFS06...:\47\41847\0008\1710\EXHD126R.050
Exhibit 4.1
<PAGE>
================================================================================
DOLLAR FINANCIAL GROUP, INC.,
as Issuer
ALBUQUERQUE INVESTMENTS, INC.
ANY KIND CHECK CASHING CENTERS, INC.
CHECK MART OF LOUISIANA, INC.
CHECK MART OF NEW JERSEY, INC.
CHECK MART OF NEW MEXICO, INC.
CHECK MART OF PENNSYLVANIA, INC.
CHECK MART OF TEXAS, INC.
CHECK MART OF UTAH, INC.
CHECK MART OF WASHINGTON, INC.
CHECK MART OF WASHINGTON, D.C., INC.
CHECK MART OF WISCONSIN, INC.
DFG WAREHOUSING CO., INC.
DOLLAR FINANCIAL INSURANCE CORP.
DOLLAR INSURANCE ADMINISTRATION CORP.
FINANCIAL EXCHANGE COMPANY OF MICHIGAN, INC.
FINANCIAL EXCHANGE COMPANY OF OHIO, INC.
FINANCIAL EXCHANGE COMPANY OF PENNSYLVANIA, INC.
FINANCIAL EXCHANGE COMPANY OF PITTSBURGH, INC.
FINANCIAL EXCHANGE COMPANY OF VIRGINIA, INC.
L.M.S. DEVELOPMENT CORPORATION
MONETARY MANAGEMENT CORP.
MONETARY MANAGEMENT CORPORATION OF PENNSYLVANIA
MONETARY MANAGEMENT OF CALIFORNIA, INC.
MONETARY MANAGEMENT OF MARYLAND, INC.
MONETARY MANAGEMENT OF NEW YORK, INC.
PACIFIC RING ENTERPRISES, INC.
U.S. CHECK EXCHANGE LIMITED PARTNERSHIP
as Guarantors
10 7/8% SENIOR NOTES DUE 2006
----------------------
INDENTURE
Dated as of November 15, 1996
----------------------
----------------------
FLEET NATIONAL BANK
----------------------
Trustee
================================================================================
<PAGE>
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
- ----------- -----------------
310 (a)(1)........................................ 7.10
(a)(2)........................................ 7.10
(a)(3)........................................ N.A.
(a)(4)........................................ N.A.
(a)(5)........................................ 7.10
(b)........................................... 7.10
(c)........................................... N.A.
311 (a)........................................... 7.11
(b)........................................... 7.11
(c)........................................... N.A.
312 (a)........................................... 2.05
(b)........................................... 11.03
(c)........................................... 11.03
313 (a)........................................... 7.06
(b)(1)........................................ 10.03
(b)(2)........................................ 7.07
(c)........................................... 7.06; 11.02
(d)........................................... 7.06
314 (a)........................................... 4.03; 11.02
(b)........................................... 10.02
(c)(1)........................................ 11.04
(c)(2)........................................ 11.04
(c)(3)........................................ N.A.
(d)........................................... 10.03, 10.04, 10.05
(e)........................................... 11.05
(f)........................................... N.A.
315 (a)........................................... 7.01
(b)........................................... 7.05, 11.02
(c)........................................... 7.01
(d)........................................... 7.01
(e)........................................... 6.11
316 (a)(last sentence)............................ 2.09
(a)(1)(A)..................................... 6.05
(a)(1)(B)..................................... 6.04
(a)(2)........................................ N.A.
(b)........................................... 6.07
(c)........................................... 2.12
317 (a)(1)........................................ 6.08
(a)(2)........................................ 6.09
(b)........................................... 2.04
318 (a)........................................... 11.01
(b)........................................... N.A.
(c)........................................... 11.01
N.A. means not applicable.
* This Cross-Reference Table is not part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS............................................. 1
SECTION 1.02. OTHER DEFINITIONS....................................... 12
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE
ACT..................................................... 12
SECTION 1.04. RULES OF CONSTRUCTION................................... 13
ARTICLE 2
THE NOTES
SECTION 2.01. FORM AND DATING......................................... 13
SECTION 2.02. EXECUTION AND AUTHENTICATION............................ 15
SECTION 2.03. REGISTRAR AND PAYING AGENT.............................. 15
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST..................... 15
SECTION 2.05. HOLDER LISTS............................................ 16
SECTION 2.06. TRANSFER AND EXCHANGE................................... 16
SECTION 2.07. REPLACEMENT NOTES....................................... 23
SECTION 2.08. OUTSTANDING NOTES....................................... 23
SECTION 2.09. TREASURY NOTES.......................................... 23
SECTION 2.10. TEMPORARY NOTES......................................... 24
SECTION 2.11. CANCELLATION............................................ 24
SECTION 2.12. DEFAULTED INTEREST...................................... 24
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE...................................... 24
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED....................... 25
SECTION 3.03. NOTICE OF REDEMPTION.................................... 25
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.......................... 26
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE............................. 26
SECTION 3.06. NOTES REDEEMED IN PART.................................. 26
SECTION 3.07. OPTIONAL REDEMPTION..................................... 26
SECTION 3.08. MANDATORY REDEMPTION.................................... 27
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS
PROCEEDS................................................ 27
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF NOTES........................................ 29
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY......................... 29
SECTION 4.03. REPORTS................................................. 30
SECTION 4.04. COMPLIANCE CERTIFICATE.................................. 30
i
<PAGE>
SECTION 4.05. TAXES................................................... 31
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.......................... 31
SECTION 4.07 RESTRICTED PAYMENTS..................................... 31
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES.................................. 33
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF
PREFERRED STOCK......................................... 33
SECTION 4.10. ASSET SALES............................................. 34
SECTION 4.11. TRANSACTIONS WITH AFFILIATES............................ 35
SECTION 4.12. LIENS................................................... 36
SECTION 4.13. LIMITATION ON ISSUANCES AND SALES OF CAPITAL
STOCK OF WHOLLY OWNED SUBSIDIARIES...................... 36
SECTION 4.14. CORPORATE EXISTENCE..................................... 36
SECTION 4.15. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.............. 36
SECTION 4.16. SALE AND LEASEBACK TRANSACTIONS......................... 38
SECTION 4.17 ADDITIONAL SUBSIDIARY GUARANTEES........................ 38
SECTION 4.18. PAYMENTS FOR CONSENT.................................... 38
SECTION 4.19. FURTHER ASSURANCES...................................... 38
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS................ 39
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED....................... 39
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT....................................... 39
SECTION 6.02. ACCELERATION............................................ 42
SECTION 6.03. OTHER REMEDIES.......................................... 42
SECTION 6.04. WAIVER OF PAST DEFAULTS................................. 42
SECTION 6.05. CONTROL BY MAJORITY..................................... 42
SECTION 6.06. LIMITATION ON SUITS..................................... 43
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT........... 43
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.............................. 43
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM........................ 43
SECTION 6.10. PRIORITIES.............................................. 44
SECTION 6.11. UNDERTAKING FOR COSTS................................... 44
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE....................................... 45
SECTION 7.02. RIGHTS OF TRUSTEE....................................... 46
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE............................ 46
SECTION 7.04. TRUSTEE'S DISCLAIMER.................................... 46
SECTION 7.05. NOTICE OF DEFAULTS...................................... 47
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.............. 47
SECTION 7.07. COMPENSATION AND INDEMNITY.............................. 47
SECTION 7.08. REPLACEMENT OF TRUSTEE.................................. 48
ii
<PAGE>
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC........................ 49
SECTION 7.10. ELIGIBILITY, DISQUALIFICATION........................... 49
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST
COMPANY................................................. 49
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT
DEFEASANCE.............................................. 49
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.......................... 49
SECTION 8.03. COVENANT DEFEASANCE..................................... 50
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.............. 50
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO
BE HELD IN TRUST; OTHER MISCELLANEOUS
PROVISIONS.............................................. 51
SECTION 8.06. REPAYMENT TO COMPANY.................................... 52
SECTION 8.07. REINSTATEMENT........................................... 52
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES..................... 52
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES........................ 53
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT..................... 54
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS....................... 54
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES........................ 55
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC......................... 55
ARTICLE 10
SUBSIDIARY GUARANTEES
SECTION 10.01. SUBSIDIARY GUARANTEES................................... 55
SECTION 10.02. EXECUTION AND DELIVERY OF SUBSIDIARY
GUARANTEES.............................................. 56
SECTION 10.03. GUARANTORS MAY CONSOLIDATE, ETC. ON CERTAIN
TERMS................................................... 56
SECTION 10.04. RELEASES OF SUBSIDIARY GUARANTEES....................... 57
SECTION 10.05. LIMITATION ON GUARANTOR LIABILITY....................... 58
SECTION 10.06. "TRUSTEE" TO INCLUDE PAYING AGENT....................... 58
SECTION 10.07. PRIORITY OF SUBSIDIARY GUARANTEE........................ 58
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT CONTROLS............................ 58
SECTION 11.02. NOTICES................................................. 59
SECTION 11.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER
HOLDERS OF NOTES........................................ 60
iii
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SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS
PRECEDENT............................................... 60
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION........... 60
SECTION 11.06. RULES BY TRUSTEE AND AGENTS............................. 61
SECTION 11.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS,
EMPLOYEES AND STOCKHOLDERS.............................. 61
SECTION 11.08. GOVERNING LAW........................................... 61
SECTION 11.09. NO ADVERSE INTERPRETATION OF OTHER
AGREEMENTS.............................................. 61
SECTION 11.10. SUCCESSORS.............................................. 61
SECTION 11.11. SEVERABILITY............................................ 61
SECTION 11.12. COUNTERPART ORIGINALS................................... 61
SECTION 11.13. TABLE OF CONTENTS, HEADINGS, ETC........................ 62
iv
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EXHIBITS
EXHIBIT A-1 FORM OF NOTE
EXHIBIT A-2 FORM OF REGULATION S TEMPORARY GLOBAL NOTE
EXHIBIT B-1 FORM OF CERTIFICATE OF EXCHANGE OR REGISTRATION OF TRANSFER
FROM RULE 144A GLOBAL NOTE TO REGULATION S GLOBAL NOTE
EXHIBIT B-2 FORM OF CERTIFICATE OF EXCHANGE OR REGISTRATION OF TRANSFER
FROM REGULATION S GLOBAL NOTE TO RULE 144A GLOBAL NOTE
EXHIBIT B-3 FORM OF CERTIFICATE OF EXCHANGE OR REGISTRATION OF TRANSFER OF
CERTIFICATED NOTES
EXHIBIT B-4 FORM OF CERTIFICATE OF EXCHANGE OR REGISTRATION OF TRANSFER
FROM RULE 144A GLOBAL NOTE OR REGULATION S PERMANENT GLOBAL
NOTE TO CERTIFICATED NOTE
EXHIBIT C GUARANTORS
EXHIBIT D FORM OF SUBSIDIARY GUARANTEE
EXHIBIT E FORM OF SUPPLEMENTAL INDENTURE
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INDENTURE dated as of November 15, 1996 among Dollar Financial Group,
Inc., a New York corporation (the "Company"), each of the Persons listed on
Exhibit C hereto (each, a "Guarantor") and Fleet National Bank, as trustee (the
"Trustee").
The Company, the Guarantors and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders of
the 10 7/8% Senior Notes due 2006 (the "Senior Notes") and the 10 7/8% Senior
Notes due 2006 to be issued in exchange for the Senior Notes in the Exchange
Offer (the "Exchange Senior Notes" and, together with the Senior Notes, the
"Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person at the time such asset
is acquired by such specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Agent Members" means any member of, or participant in, the Depositary.
"Applicable Procedures" means, with respect to any transfer or exchange
of beneficial interests in a Global Note, the rules and procedures of the
Depositary, Euroclear and Cedel Bank that are applicable to such transfer or
exchange.
"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value (discounted at the rate
of interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such sale and leaseback transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
<PAGE>
"Board of Directors" means the Board of Directors of the Company, or
any authorized committee of the Board of Directors.
"Borrowing Base" means the sum of the following: (i) 100% of cash held
overnight in store safes; (ii) 100% of balances held in store accounts; (iii)
100% of checks held in store safes; (iv) 100% of clearing house transfers
initiated on the previous day and transfers of same-day funds to be credited to
store accounts; (v) 100% of cash held overnight by armored car carriers; (vi)
100% of eligible government receivables in respect of government contracts; and
(vii) 100% of cash balances held in demand deposit accounts and/or investment
accounts. The Borrowing Base shall be determined by the Company upon each
incurrence of Indebtedness, and such determination shall be conclusive so long
as it is made in good faith.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited) and (iv) any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully Guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than six months from the date of acquisition, (iii) certificates of deposit
and eurodollar time deposits with maturities of six months or less from the date
of acquisition, bankers' acceptances with maturities not exceeding six months
and overnight bank deposits, in each case with any lender party to the Credit
Agreement or with any domestic commercial bank having capital and surplus in
excess of $500.0 million and a Thompson Bank Watch Rating of "B" or better, (iv)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (ii) and (iii) above entered into
with any financial institution meeting the qualifications specified in clause
(iii) above, (v) commercial paper having the highest rating obtainable from
Moody's Investors Service, Inc. or Standard & Poor's Ratings Group and (vi)
money market funds registered with the Commission and meeting the requirements
of Section 2(a)(7) of the Investment Company Act of 1940, as amended, and, in
each case, maturing within six months after the date of acquisition.
"Cedel Bank" means Cedel Bank, societe anonyme.
"Change of Control" means the occurrence of any of the following: (i)
the sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Subsidiaries taken as a
whole to any "person" (as such term is used in Section 13(d)(3) of the Exchange
Act), other than the Principals or their Related Parties, (ii) the adoption of a
plan relating to the liquidation or dissolution of the Company, (iii) the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any "person" (as defined above),
other than the Principals and their Related Parties, becomes the "beneficial
owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange
Act), directly or indirectly, of more than 35% of the voting stock of Holdings
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or the Company, (iv) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that Holdings
ceases to own 100% of the outstanding Equity Interests of the Company or (v) the
first day on which a majority of the members of the Board of Directors of the
Company are not Continuing Directors.
"Commission" means the Securities and Exchange Commission.
"Company" means Dollar Financial Group, Inc., a New York corporation.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus (i) an
amount equal to any extraordinary or non-recurring loss plus any net loss
realized in connection with an Asset Sale, the disposition of any securities by
such Person or any of its Subsidiaries or the extinguishment of any Indebtedness
by such Person or its Subsidiaries (to the extent such losses were deducted in
computing such Consolidated Net Income), plus (ii) provision for taxes based on
income or profits of such Person and its Subsidiaries for such period, to the
extent that such provision for taxes was included in computing such Consolidated
Net Income, plus (iii) consolidated interest expense of such Person and its
Subsidiaries for such period, whether paid or accrued and whether or not
capitalized (including, without limitation, amortization of original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings, and net payments (if any) pursuant
to Hedging Obligations), to the extent that any such expense was deducted in
computing such Consolidated Net Income, plus (iv) depreciation, amortization
(including amortization of goodwill and other intangibles but excluding
amortization of prepaid cash expenses that were paid in a prior period) and
other non-cash charges (excluding any such non-cash charge to the extent that it
represents an accrual of or reserve for cash charges in any future period or
amortization of a prepaid cash expense that was paid in a prior period) of such
Person and its Subsidiaries for such period to the extent that such
depreciation, amortization and other non-cash charges were deducted in computing
such Consolidated Net Income, minus (v) non-cash items increasing consolidated
revenues in determining such Consolidated Net Income for such period, minus (vi)
the amount of Earn-out Obligations paid during such period (to the extent not
already reflected as an expense in Consolidated Net Income), in each case, on a
consolidated basis and determined in accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP;
provided that (i) the Net Income (but not loss) of any Person that is not a
Subsidiary or that is accounted for by the equity method of accounting shall be
included only to the extent of the amount of dividends or distributions paid in
cash to the referent Person or a Wholly Owned Subsidiary thereof, (ii) the Net
Income of any Subsidiary shall be excluded to the extent that the declaration or
payment of dividends or similar distributions by that Subsidiary of that Net
Income is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Subsidiary or its stockholders, (iii) the Net Income of any Person acquired in a
pooling of interests transaction for any period prior to the date of such
acquisition shall be excluded and (iv) the cumulative effect of a change in
accounting principles shall be excluded.
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<PAGE>
"Consolidated Net Worth" means, with respect to any Person as of any
date, the sum of (i) the consolidated equity of the common stockholders of such
Person and its consolidated Subsidiaries as of such date plus (ii) the
respective amounts reported on such Person's balance sheet as of such date with
respect to any series of preferred stock (other than Disqualified Stock) that by
its terms is not entitled to the payment of dividends unless such dividends may
be declared and paid only out of net earnings in respect of the year of such
declaration and payment, but only to the extent of any cash received by such
Person upon issuance of such preferred stock, less (x) all write-ups (other than
write-ups resulting from foreign currency translations and write-ups of tangible
assets of a going concern business made within 12 months after the acquisition
of such business) subsequent to the date of this Indenture in the book value of
any asset owned by such Person or a consolidated Subsidiary of such Person and
(y) all unamortized debt discount and expense and unamortized deferred charges
as of such date, all of the foregoing determined in accordance with GAAP.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the date of this Indenture or (ii) was nominated for
election or elected to such Board of Directors with the approval, recommendation
or endorsement of a majority of the Continuing Directors who were members of
such Board at the time of such nomination or election.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 11.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Credit Agreement" means that certain Second Amended and Restated
Credit Agreement, dated as of the date of this Indenture, by and among the
Company, the Guarantors, Bank of America NT&SA, as administrative agent, and the
lenders party thereto, including any related notes, Guarantees, collateral
documents, instruments and agreements executed in connection therewith, and in
each case as amended, modified, renewed, refunded, replaced or refinanced from
time to time.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Definitive Notes" means Notes that are in the form of the Notes
attached hereto as Exhibit A, that do not include the information called for by
footnotes 1 and 2 thereof.
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the Notes, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
that is 91 days after the date on which the Notes mature.
"Earn-out Obligations" means contingent payment obligations of the
Company or any of its Subsidiaries incurred in connection with the acquisition
of assets or businesses, which obligations are payable based on the performance
of the assets or businesses so acquired; provided that the amount of such
obligations shall not exceed 25% of the total consideration paid for such assets
or businesses; and
4
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provided, further, that the amount of such obligations outstanding at any time
shall be measured by the maximum amount potentially payable thereunder without
regard to performance criteria, the passage of time or other conditions.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
Office, as operator of the Euroclear System.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" means the offer that may be made by the Company
pursuant to the Registration Rights Agreement to exchange Exchange Senior Notes
for Senior Notes.
"Existing Indebtedness" means (i) $5.1 million of Indebtedness incurred
in connection with the acquisition of Cash-N-Dash Check Cashing, Inc. and (ii)
up to $3.0 million in aggregate principal amount of Indebtedness of the Company
and its Subsidiaries (other than Indebtedness under the Credit Agreement or any
predecessor bank credit facility) in existence on the date of this Indenture, in
each case, until such amounts are repaid.
"Fixed Charges" means, with respect to any Person for any period, the
sum of, without duplication, (i) the consolidated interest expense of such
Person and its Subsidiaries for such period, whether paid or accrued (including,
without limitation, amortization of original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease Obligations,
imputed interest with respect to Attributable Debt, commissions, discounts and
other fees and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net payments (if any) pursuant to Hedging
Obligations) and (ii) the consolidated interest expense of such Person and its
Subsidiaries that was capitalized during such period, and (iii) any interest
expense on Indebtedness of another Person that is Guaranteed by such Person or
one of its Subsidiaries or secured by a Lien on assets of such Person or one of
its Subsidiaries (whether or not such Guarantee or Lien is called upon) and (iv)
the product of (A) all cash dividend payments (and non-cash dividend payments in
the case of a Person that is a Subsidiary) on any series of preferred stock of
such Person, times (B) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal, state and
local statutory tax rate of such Person, expressed as a decimal, in each case,
on a consolidated basis and in accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person for such period
to the Fixed Charges of such Person for such period. In the event that the
Company or any of its Subsidiaries incurs, assumes, Guarantees or redeems any
Indebtedness (other than revolving credit borrowings) or issues preferred stock
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated but prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"),
the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to
such incurrence, assumption, Guarantee or redemption of Indebtedness, or such
issuance or redemption of preferred stock (including the application of any
proceeds therefrom), as if the same had occurred at the beginning of the
applicable four-quarter reference period. In addition, for purposes of making
the computation referred to above, (i) acquisitions that have been made by the
Company or any of its Subsidiaries, including through mergers or consolidations
and including any related financing transactions,
5
<PAGE>
during the four-quarter reference period or subsequent to such reference period
and on or prior to the Calculation Date shall be deemed to have occurred on the
first day of the four-quarter reference period and Consolidated Cash Flow for
such reference period shall be calculated to include the Consolidated Cash Flow
of the acquired entities (adjusted to exclude (x) the cost of any compensation,
remuneration or other benefit paid or provided to any employee, consultant,
Affiliate or equity owner of the acquired entities to the extent such costs are
eliminated and not replaced and (y) the amount of any reduction in general,
administrative or overhead costs of the acquired entities, in each case, as
determined in good faith by an officer of the Company) and without giving effect
to clause (iii) of the proviso set forth in the definition of Consolidated Net
Income, and (ii) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, shall be excluded, and (iii) the
Fixed Charges attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded, but only to the extent that the obligations
giving rise to such Fixed Charges will not be obligations of the referent Person
or any of its Subsidiaries following the Calculation Date.
"GAAP" means United States generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect on the date of this Indenture.
"Global Notes" means, individually and collectively, the Regulation S
Temporary Global Note, the Regulation S Permanent Global Note and the Rule 144A
Global Note.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Guarantors" means each of (i) Albuquerque Investments, Inc., Any Kind
Check Cashing Centers, Inc., Check Mart of Louisiana, Inc., Check Mart of New
Mexico, Inc., Check Mart of New Jersey, Inc., Check Mart of Pennsylvania, Inc.,
Check Mart of Texas, Inc., Check Mart of Utah, Inc., Check Mart of Washington,
Inc., Check Mart of Washington, D.C., Inc., Check Mart of Wisconsin, Inc., DFG
Warehousing Co., Inc., Dollar Financial Insurance Corp., Dollar Insurance
Administration Corp., Financial Exchange Company of Michigan, Inc., Financial
Exchange Company of Ohio, Inc., Financial Exchange Company of Pennsylvania,
Inc., Financial Exchange Company of Pittsburgh, Inc., Financial Exchange Company
of Virginia, Inc., L.M.S. Development Corporation, Monetary Management Corp.,
Monetary Management Corporation of Pennsylvania, Monetary Management of
California, Inc., Monetary Management of Maryland, Inc., Monetary Management of
New York, Inc., Pacific Ring Enterprises, Inc. and U.S. Check Exchange Limited
Partnership and (ii) any other domestic Subsidiary of the Company that executes
a Subsidiary Guarantee in accordance with the provisions of this Indenture, and
their respective successors and assigns.
6
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"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates.
"Holder" means a Person in whose name a Note is registered.
"Holdings" means DFG Holdings, Inc., a Delaware corporation and the
100% owner of the Company.
"Indebtedness" means, with respect to any Person, any indebtedness of
such Person, whether or not contingent, (i) in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or banker's acceptances,
(ii) representing Capital Lease Obligations, (iii) the balance deferred and
unpaid of the purchase price of any property, except any such balance that
constitutes an accrued expense or trade payable, or (iv) representing any
Hedging Obligations, if and to the extent any of the foregoing indebtedness
(other than letters of credit and Hedging Obligations) would appear as a
liability upon a balance sheet of such Person prepared in accordance with GAAP,
as well as all indebtedness of others secured by a Lien on any asset of such
Person (whether or not such indebtedness is assumed by such Person) and, to the
extent not otherwise included, the Guarantee by such Person of any Indebtedness
of any other Person.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the form of direct or
indirect loans (including Guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP;
provided that an acquisition of assets, Equity Interests or other securities by
the Company for consideration consisting of common equity securities of the
Company shall not be deemed to be an Investment. If the Company or any
Subsidiary of the Company sells or otherwise disposes of any Equity Interests of
any direct or indirect Subsidiary of the Company such that, after giving effect
to any such sale or disposition, such Person is no longer a Subsidiary of the
Company, the Company shall be deemed to have made an Investment on the date of
any such sale or disposition equal to the fair market value of the Equity
Interests of such Subsidiary not sold or disposed of.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or the city in which the principal
corporate trust office of the Trustee is located or at a place of payment are
authorized by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
7
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"Liquidated Damages" means all liquidated damages then owing pursuant
to Section 5 of the Registration Rights Agreement.
"Net Income" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (A) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions) or (B) the
disposition of any securities by such Person or any of its Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of its Subsidiaries and
(ii) any extraordinary or nonrecurring gain (but not loss), together with any
related provision for taxes on such extraordinary or nonrecurring gain (but not
loss).
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale (including, without limitation, legal, accounting
and investment banking fees, and sales commissions) and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements), amounts required to be applied to the repayment of Indebtedness
(other than revolving credit Indebtedness under the Credit Agreement) secured by
a Lien on the asset or assets that were the subject of such Asset Sale and any
reserve for adjustment in respect of the sale price of such asset or assets
established in accordance with GAAP.
"Note Custodian" means the Trustee, as custodian with respect to the
Notes in global form, or any successor entity thereto.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering" means the Offering of the Notes by the Company.
"Officer" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 11.05 hereof.
"Opinion of Counsel" means an opinion, in form and substance reasonably
satisfactory to the Trustee, from legal counsel who is reasonably acceptable to
the Trustee, that meets the requirements of Section 11.05 hereof. The counsel
may be an employee of or counsel to the Company, any Subsidiary of the Company
or the Trustee.
"Permitted Investments" means (a) any Investment in the Company or in a
Wholly Owned Subsidiary of the Company that is a Guarantor and that is engaged
in the same or a similar line of business as the Company and its Subsidiaries
were engaged in on the date of this Indenture; (b) any Investment in Cash
Equivalents or the Notes; (c) any Investment by the Company or any Subsidiary of
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the Company in a Person, if as a result of such Investment (i) such Person
becomes a Wholly Owned Subsidiary of the Company and a Guarantor that is engaged
in the same or a similar line of business as the Company and its Subsidiaries
were engaged in on the date of this Indenture or (ii) such Person is merged,
consolidated or amalgamated with or into, or transfers or conveys substantially
all of its assets to, or is liquidated into, the Company or a Wholly Owned
Subsidiary of the Company that is a Guarantor and that is engaged in the same or
a similar line of business as the Company and its Subsidiaries were engaged in
on the date of this Indenture; (d) any Restricted Investment made as a result of
the receipt of non-cash consideration from an Asset Sale that was made pursuant
to and in compliance with the provisions of Section 4.10 hereof; (e) other
Investments in any Person (other than Holdings or an Affiliate of Holdings that
is not also a Subsidiary of the Company) having an aggregate fair market value
(measured on the date each such Investment was made and without giving effect to
subsequent changes in value), when taken together with all other Investments
made pursuant to this clause (e) that are at the time outstanding, not to exceed
$3.0 million; and (f) any loan by the Company to a Wholly Owned Subsidiary of
the Company that is not a Guarantor and any other Investment in a Wholly Owned
Subsidiary of the Company that is not a Guarantor to the extent necessary to
preserve the full deductibility of interest relating to Indebtedness of such
Subsidiary.
"Permitted Liens" means (i) Liens securing Indebtedness under the
Credit Agreement that was permitted by the terms of this Indenture to be
incurred; (ii) Liens in favor of the Company; (iii) Liens on property of a
Person existing at the time such Person is merged into or consolidated with the
Company or any Subsidiary of the Company, provided that such Liens were in
existence prior to the contemplation of such merger or consolidation and do not
extend to any assets other than those of the Person merged into or consolidated
with the Company; (iv) Liens on property existing at the time of acquisition
thereof by the Company or any Subsidiary of the Company, provided that such
Liens were in existence prior to the contemplation of such acquisition; (v)
Liens to secure the performance of statutory obligations, surety or appeal
bonds, performance bonds or other obligations of a like nature incurred in the
ordinary course of business; (vi) Liens securing Indebtedness (including Capital
Lease Obligations) permitted by clause (iv) of Section 4.09(b) hereof covering
only the assets acquired with such Indebtedness; (vii) Liens existing on the
date of this Indenture; (viii) Liens for taxes, assessments or governmental
charges or claims that are not yet delinquent or that are being contested in
good faith by appropriate proceedings promptly instituted and diligently
concluded, provided that any reserve or other appropriate provision as shall be
required in conformity with GAAP shall have been made therefor; (ix) Liens
incurred in the ordinary course of business of the Company or any Subsidiary of
the Company with respect to obligations that do not exceed $5.0 million at any
one time outstanding and that (A) are not incurred in connection with the
borrowing of money or the obtaining of advances or credit (other than trade
credit in the ordinary course of business) and (B) do not in the aggregate
materially detract from the value of the property or materially impair the use
thereof in the operation of business by the Company or such Subsidiary; and (x)
Liens securing Permitted Refinancing Debt, provided that the Company was
permitted to incur Liens with respect to the Indebtedness so refinanced.
"Permitted Refinancing Debt" means any Indebtedness of the Company or
any of its Subsidiaries issued in exchange for, or the net proceeds of which are
used to extend, refinance, renew, replace, defease or refund other Indebtedness
of the Company or any of its Subsidiaries; provided that (i) the principal
amount (or accreted value, if applicable) of such Permitted Refinancing
Indebtedness does not exceed the principal amount plus accrued interest (or
accreted value, if applicable) of the Indebtedness so extended, refinanced,
renewed, replaced, defeased or refunded (plus the amount of reasonable expenses
incurred in connection therewith); (ii) such Permitted Refinancing Debt has a
final maturity date later than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Indebtedness being extended, refinanced, renewed, replaced,
9
<PAGE>
defeased or refunded; (iii) if the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded is subordinated in right of payment to
the Notes, such Permitted Refinancing Debt has a final maturity date later than
the final maturity date of, and is subordinated in right of payment to, the
Notes on terms at least as favorable to the Holders of Notes as those contained
in the documentation governing the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded; and (iv) such Indebtedness is incurred
either by the Company or by the Subsidiary who is the obligor on the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or agency or political subdivision thereof (including any subdivision
or ongoing business of any such entity or substantially all of the assets of any
such entity, subdivision or business).
"Principals" means Weiss, Peck and Greer, General Electric Capital
Corporation, Pegasus Partners, L.P., or any person that is a general partner of
either Weiss, Peck & Greer or Pegasus Partners, L.P. as of the date of this
Indenture.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of November _, 1996, by and among the Company and the other
parties named on the signature pages thereof, as such agreement may be amended,
modified or supplemented from time to time.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a Regulation S Temporary Global Note
or Regulation S Permanent Global Note, as appropriate.
"Regulation S Permanent Global Note" means a permanent global note that
contains the paragraph referred to in footnote 1 and the additional schedule
referred to in footnote 2 to the form of the Note attached hereto as Exhibit
A-1, and that is deposited with and registered in the name of the Depositary,
representing a series of Notes sold in reliance on Regulation S.
"Regulation S Temporary Global Note " means a single temporary global
note in the form of the Note attached hereto as Exhibit A-2 that is deposited
with and registered in the name of the Depositary, representing a series of
Notes sold in reliance on Regulation S.
"Related Party" with respect to any Principal means any Subsidiary of
such Principal.
"Responsible Officer" when used with respect to the Trustee, means any
officer or employee acting as a Trustee administrator within the Corporate Trust
Administration of the Trustee (or any successor group of the Trustee) or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
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<PAGE>
"Rule 144A Global Note" means a permanent global note that contains the
paragraph referred to in footnote 1 and the additional schedule referred to in
footnote 2 to the form of the Note attached hereto as Exhibit A-1, and that is
deposited with and registered in the name of the Depositary, representing a
series of Notes sold in reliance on Rule 144A.
"Securities Act" means the Securities Act of 1933, as amended.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Act, as such Regulation is in effect on the date
hereof.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (A) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (B)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
"Subsidiary Guarantees" means the Guarantees by the Guarantors of the
Obligations under this Indenture and the Notes.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"Transfer Restricted Securities" means securities that bear or are
required to bear the legend set forth in Section 2.06 hereof.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"U.S. Person" has the meaning specified in Regulation S.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (A) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (B) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such
Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person and one
or more Wholly Owned Subsidiaries of such Person.
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<PAGE>
SECTION 1.02. OTHER DEFINITIONS.
<TABLE>
<CAPTION>
Defined in
Term Section
---- -------
<S> <C>
"Accredited Investor"................................................................... 2.01
"Affiliate Transaction"................................................................. 4.11
"Asset Sale"............................................................................ 4.10
"Asset Sale Offer"...................................................................... 3.09
"Change of Control Offer"............................................................... 4.15
"Change of Control Payment"............................................................. 4.15
"Change of Control Payment Date"........................................................ 4.15
"Covenant Defeasance"................................................................... 8.03
"Custodian"............................................................................. 4.13
"DTC"................................................................................... 2.03
"Event of Default"...................................................................... 6.01
"Excess Proceeds"....................................................................... 4.10
"incur"................................................................................. 4.09
"Legal Defeasance"...................................................................... 8.02
"Notice of Default"..................................................................... 6.01
"Offer Amount".......................................................................... 3.09
"Offer Period".......................................................................... 3.09
"Paying Agent".......................................................................... 2.03
"Payment Default"....................................................................... 6.01
"Purchase Date"......................................................................... 3.09
"QIB"................................................................................... 2.01
"Registrar"............................................................................. 2.03
"Restricted Payments"................................................................... 4.07
</TABLE>
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee;
"obligor" on the Notes means the Company and any successor
obligor upon the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule under
the TIA have the meanings so assigned to them.
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<PAGE>
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular;
(5) provisions apply to successive events and
transactions; and
(6) references to sections of or rules under the
Securities Act shall be deemed to include substitute,
replacement of successor sections or rules adopted by
the Commission from time to time.
ARTICLE 2
THE NOTES
SECTION 2.01. FORM AND DATING.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibits A-1 and Exhibits A-2 attached hereto. The
Notes may have notations, legends or endorsements required by law, stock
exchange rule or usage. Each Note shall be dated the date of its authentication.
The Notes shall be issued in minimum denominations of $1,000 and integral
multiples of $1,000 in excess thereof. The terms and provisions contained in the
Notes shall constitute, and are hereby expressly made, a part of this Indenture
and the Company, the Guarantors and the Trustee, by their execution and delivery
of this Indenture, expressly agree to such terms and provisions and to be bound
thereby.
(a) Global Notes. Notes offered and sold to (i) qualified institutional
buyers as defined in Rule 144A ("QIBs") in reliance on Rule 144A and (ii)
institutional accredited investors as defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act ("Accredited Investors") who are not QIBs, shall be
issued initially in the form of Rule 144A Global Notes, which shall be deposited
on behalf of the purchasers of the Notes represented thereby with the Depositary
at its New York office, and registered in the name of the Depositary or a
nominee of the Depositary, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. The aggregate principal amount of the Rule 144A
Global Notes may from time to time be increased or decreased by adjustments made
on the records of the Trustee and the Depositary or its nominee as hereinafter
provided.
Notes offered and sold in reliance on Regulation S shall be issued
initially in the form of the Regulation S Temporary Global Note, which shall be
deposited on behalf of the purchasers of the Notes represented thereby with the
Trustee, at its New York office, as custodian for the Depositary, and registered
in the name of the Depositary or the nominee of the Depositary for the accounts
of designated agents holding on behalf of Euroclear or Cedel Bank, duly executed
by the Company and authenticated by the Trustee as hereinafter provided. The
"40-day restricted period" (as defined in Regulation S) shall be terminated upon
the receipt by the Trustee of (i) a written certificate from the Depositary,
together
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<PAGE>
with copies of certificates from Euroclear and Cedel Bank certifying that they
have received certification of non-United States beneficial ownership of 100% of
the aggregate principal amount of the Regulation S Temporary Global Note (except
to the extent of any beneficial owners thereof who acquired an interest therein
pursuant to another exemption from registration under the Securities Act and who
will take delivery of a beneficial ownership interest in a Rule 144A Global
Note, all as contemplated by Section 2.06(a)(ii) hereof), and (ii) an Officers'
Certificate from the Company. Following the termination of the 40-day restricted
period, beneficial interests in the Regulation S Temporary Global Note shall be
exchanged for beneficial interests in Regulation S Permanent Global Notes
pursuant to the Applicable Procedures. Simultaneously with the authentication of
Regulation S Permanent Global Notes, the Trustee shall cancel the Regulation S
Temporary Global Note. The aggregate principal amount of the Regulation S
Temporary Global Note and the Regulation S Permanent Global Notes may from time
to time be increased or decreased by adjustments made on the records of the
Trustee and the Depositary or its nominee, as the case may be, in connection
with transfers of interest as hereinafter provided.
Each Global Note shall represent such of the outstanding Notes as shall
be specified therein and each shall provide that it shall represent the
aggregate amount of outstanding Notes from time to time endorsed thereon and
that the aggregate amount of outstanding Notes represented thereby may from time
to time be reduced or increased, as appropriate, to reflect exchanges and
redemptions. Any endorsement of a Global Note to reflect the amount of any
increase or decrease in the amount of outstanding Notes represented thereby
shall be made by the Trustee or the Note Custodian, at the direction of the
Trustee, in accordance with instructions given by the Holder thereof as required
by Section 2.06 hereof.
The provisions of the "Operating Procedures of the Euroclear System"
and "Terms and Conditions Governing Use of Euroclear" and the "Management
Regulations" and "Instructions to Participants" of Cedel Bank shall be
applicable to interests in the Regulation S Temporary Global Note and the
Regulation S Permanent Global Notes that are held by the Agent Members through
Euroclear or Cedel Bank.
Except as set forth in Section 2.06 hereof, the Global Notes may be
transferred, in whole and not in part, only to another nominee of the Depositary
or to a successor of the Depositary or its nominee.
(b) Book-Entry Provisions. This Section 2.01(b) shall apply only to
Rule 144A Global Notes and the Regulation S Permanent Global Notes deposited
with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.01(b), authenticate and deliver the Global Notes that (i) shall
be registered in the name of the Depositary or the nominee of the Depositary and
(ii) shall be delivered by the Trustee to the Depositary or pursuant to the
Depositary's instructions or held by the Trustee as custodian for the
Depositary.
Agent Members shall have no rights either under this Indenture with
respect to any Global Note held on their behalf by the Depositary or by the
Trustee as custodian for the Depositary or under such Global Note, and the
Depositary may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner of such Global Note for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and its Agent Members, the
operation of customary practices of such Depositary governing the exercise of
the rights of an owner of a beneficial interest in any Global Note.
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<PAGE>
(c) Certificated Notes. Notes issued in certificated form shall be
substantially in the form of Exhibit A-1 attached hereto (but without including
the text referred to in footnotes 1 and 2 thereto).
SECTION 2.02. EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Notes for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Note no longer holds that office
at the time a Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Note has
been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by two
Officers directing the Trustee to authenticate the Notes and certifying that all
conditions precedent to the issuance of the Notes contained herein have been
complied with, authenticate Notes for original issue up to the aggregate
principal amount stated in paragraph 4 of the Notes. The aggregate principal
amount of Notes outstanding at any time may not exceed such amount except as
provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company shall notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or interest on the Notes, and
will promptly notify the Trustee of any default by the Company in making any
such payment. While
15
<PAGE>
any such default continues, the Trustee may require a Paying Agent to pay all
money held by it to the Trustee. The Company at any time may require a Paying
Agent to pay all money held by it to the Trustee. Upon payment over to the
Trustee, the Paying Agent (if other than the Company or a Subsidiary) shall have
no further liability for the money. If the Company or a Subsidiary acts as
Paying Agent, it shall segregate and hold in a separate trust fund for the
benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy
or reorganization proceedings relating to the Company, the Trustee shall serve
as Paying Agent for the Notes.
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is
not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA ss. 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Global Notes. The transfer and exchange of
Global Notes or beneficial interests therein shall be effected through the
Depositary, in accordance with this Indenture and the procedures of the
Depositary therefor, which shall include restrictions on transfer comparable to
those set forth herein to the extent required by the Securities Act. Beneficial
interests in a Global Note may be transferred to Persons who take delivery
thereof in the form of a beneficial interest in the same Global Note in
accordance with the transfer restrictions set forth in the legend in subsection
(g) of this Section 2.06. Transfers of beneficial interests in the Global Notes
to Persons required to take delivery thereof in the form of an interest in
another Global Note shall be permitted as follows:
(i) Rule 144A Global Note to Regulation S Global Note. If, at
anytime, an owner of a beneficial interest in a Rule 144A
Global Note deposited with the Depositary (or the Trustee as
custodian for the Depositary) wishes to transfer its interest
in such Rule 144A Global Note to a Person who is required or
permitted to take delivery thereof in the form of an interest
in a Regulation S Global Note, such owner shall, subject to
the Applicable Procedures, exchange or cause the exchange of
such interest for an equivalent beneficial interest in a
Regulation S Global Note as provided in this Section
2.06(a)(i). Upon receipt by the Trustee of (1) instructions
given in accordance with the Applicable Procedures from an
Agent Member directing the Trustee to credit or cause to be
credited a beneficial interest in the Regulation S Global Note
in an amount equal to the beneficial interest in the Rule 144A
Global Note to be exchanged, (2) a written order given in
accordance with the Applicable Procedures containing
information regarding the participant account of the
Depositary and the Euroclear or Cedel Bank account to be
credited with such increase, and (3) a certificate in the form
of Exhibit B-1 hereto given by the owner of such beneficial
interest stating that the transfer of such interest has been
made in compliance with the transfer restrictions applicable
to the Global Notes and pursuant to and in accordance with
Rule 903 or Rule 904 of Regulation S, then the Trustee, as
Registrar, shall instruct the Depositary to reduce or cause to
be reduced the aggregate principal amount at maturity of the
applicable Rule 144A Global Note and to increase or cause to
be increased the aggregate principal amount at maturity of the
applicable Regulation S Global Note by the principal amount at
maturity of the beneficial interest in the Rule
16
<PAGE>
144A Global Note to be exchanged, to credit or cause to be
credited to the account of the Person specified in such
instructions a beneficial interest in the Regulation S Global
Note equal to the reduction in the aggregate principal amount
at maturity of the Rule 144A Global Note, and to debit, or
cause to be debited, from the account of the Person making
such exchange or transfer the beneficial interest in the Rule
144A Global Note that is being exchanged or transferred.
(ii) Regulation S Global Note to Rule 144A Global Note. If, at any
time, an owner of a beneficial interest in a Regulation S
Global Note deposited with the Depositary or with the Trustee
as custodian for the Depositary wishes to transfer its
interest in such Regulation S Global Note to a Person who is
required or permitted to take delivery thereof in the form of
an interest in a Rule 144A Global Note, such owner shall,
subject to the Applicable Procedures, exchange or cause the
exchange of such interest for an equivalent beneficial
interest in a Rule 144A Global Note as provided in this
Section 2.06(a)(ii). Upon receipt by the Trustee of (1)
instructions from Euroclear or Cedel Bank, if applicable, and
the Depositary, directing the Trustee, as Registrar, to credit
or cause to be credited a beneficial interest in the Rule 144A
Global Note equal to the beneficial interest in the Regulation
S Global Note to be exchanged, such instructions to contain
information regarding the participant account with the
Depositary to be credited with such increase, (2) a written
order given in accordance with the Applicable Procedures
containing information regarding the participant account of
the Depositary and (3) a certificate in the form of Exhibit
B-2 attached hereto given by the owner of such beneficial
interest stating (A) if the transfer is pursuant to Rule 144A,
that the Person transferring such interest in a Regulation S
Global Note reasonably believes that the Person acquiring such
interest in a Rule 144A Global Note is a QIB and is obtaining
such beneficial interest in a transaction meeting the
requirements of Rule 144A and any applicable blue sky or
securities laws of any state of the United States, (B) that
the transfer complies with the requirements of Rule 144A under
the Securities Act and any applicable blue sky or securities
laws of any state of the United States or (C) if the transfer
is pursuant to any other exemption from the registration
requirements of the Securities Act, that the transfer of such
interest has been made in compliance with the transfer
restrictions applicable to the Global Notes and pursuant to
and in accordance with the requirements of the exemption
claimed, such statement to be supported by an Opinion of
Counsel from the transferee or the transferor in form
reasonably acceptable to the Company and to the Registrar,
then the Trustee, as Registrar, shall instruct the Depositary
to reduce or cause to be reduced the aggregate principal
amount at maturity of such Regulation S Global Note and to
increase or cause to be increased the aggregate principal
amount at maturity of the applicable Rule 144A Global Note by
the principal amount at maturity of the beneficial interest in
the Regulation S Global Note to be exchanged, and the Trustee,
as Registrar, shall instruct the Depositary, concurrently with
such reduction, to credit or cause to be credited to the
account of the Person specified in such instructions a
beneficial interest in the applicable Rule 144A Global Note
equal to the reduction in the aggregate principal amount at
maturity of such Regulation S Global Note and to debit or
cause to be debited from the account of the Person making such
transfer the beneficial interest in the Regulation S Global
Note that is being transferred.
(b) Transfer and Exchange of Certificated Notes. When Certificated
Notes are presented by a Holder to the Registrar with a request:
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(x) to register the transfer of the Certificated Notes;
or
(y) to exchange such Certificated Notes for an equal
principal amount of Certificated Notes of other
authorized denominations,
the Registrar shall register the transfer or make the exchange as requested;
provided, however, that the Certificated Notes presented or surrendered for
register of transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the
Registrar duly executed by such Holder or by his
attorney, duly authorized in writing; and
(ii) in the case of a Certificated Note that is a Transfer
Restricted Security, such request shall be accompanied
by the following additional information and documents,
as applicable:
(A) if such Transfer Restricted Security is
being delivered to the Registrar by a Holder
for registration in the name of such Holder,
without transfer, or such Transfer
Restricted Security is being transferred to
the Company, a certification to that effect
from such Holder (in substantially the form
of Exhibit B-3 hereto);
(B) if such Transfer Restricted Security is
being transferred to a QIB in accordance
with Rule 144A under the Securities Act or
pursuant to an exemption from registration
in accordance with Rule 144 under the
Securities Act or pursuant to an effective
registration statement under the Securities
Act, a certification to that effect from
such Holder (in substantially the form of
Exhibit B-3 hereto); or
(C) if such Transfer Restricted Security is
being transferred in reliance on any other
exemption from the registration requirements
of the Securities Act, a certification to
that effect from such Holder (in
substantially the form of Exhibit B-3
hereto) and an Opinion of Counsel from such
Holder or the transferee reasonably
acceptable to the Company and to the
Registrar to the effect that such transfer
is in compliance with the Securities Act.
(c) Transfer of a Beneficial Interest in a Rule 144A Global Note or
Regulation S Permanent Global Note for a Certificated Note.
(i) Any Person having a beneficial interest in a Rule
144A Global Note or Regulation S Permanent Global
Note may upon request, subject to the Applicable
Procedures, exchange such beneficial interest for a
Certificated Note. Upon receipt by the Trustee of
written instructions or such other form of
instructions as is customary for the Depositary (or
Euroclear or Cedel Bank, if applicable), from the
Depositary or its nominee on behalf of any Person
having a beneficial interest in a Rule 144A Global
Note or Regulation S Permanent Global Note, and, in
the case of a Transfer Restricted Security, the
following additional information and documents (all
of which may be submitted by facsimile):
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(A) if such beneficial interest is being
transferred to the Person designated by the
Depositary as being the beneficial owner, a
certification to that effect from such
Person (in substantially the form of Exhibit
B-4 hereto);
(B) if such beneficial interest is being
transferred to a QIB in accordance with Rule
144A under the Securities Act or pursuant to
an exemption from registration in accordance
with Rule 144 under the Securities Act or
pursuant to an effective registration
statement under the Securities Act, a
certification to that effect from the
transferor (in substantially the form of
Exhibit B-4 hereto; or
(C) if such beneficial interest is being
transferred in reliance on any other
exemption from the registration requirements
of the Securities Act, a certification to
that effect from the transferor (in
substantially the form of Exhibit B-4
hereto) and an Opinion of Counsel from the
transferee or the transferor reasonably
acceptable to the Company and to the
Registrar to the effect that such transfer
is in compliance with the Securities Act,
in which case the Trustee or the Note Custodian, at
the direction of the Trustee, shall, in accordance
with the standing instructions and procedures
existing between the Depositary and the Note
Custodian, cause the aggregate principal amount of
Rule 144A Global Notes or Regulation S Permanent
Global Notes, as applicable, to be reduced
accordingly and, following such reduction, the
Company shall execute and, the Trustee shall
authenticate and deliver to the transferee a
Certificated Note in the appropriate principal
amount.
(ii) Certificated Notes issued in exchange for a
beneficial interest in a Rule 144A Global Note or
Regulation S Permanent Global Note, as applicable,
pursuant to this Section 2.06(c) shall be registered
in such names and in such authorized denominations as
the Depositary, pursuant to instructions from its
direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such
Certificated Notes to the Persons in whose names such
Notes are so registered. Following any such issuance
of Certificated Notes, the Trustee, as Registrar,
shall instruct the Depositary to reduce or cause to
be reduced the aggregate principal amount at maturity
of the applicable Global Note to reflect the
transfer.
(d) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provision of this Indenture (other than the provisions
set forth in subsection (f) of this Section 2.06), a Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary.
(e) Transfer and Exchange of a Certificated Note for a Beneficial
Interest in a Global Note. A Certificated Note may not be transferred or
exchanged for a beneficial interest in a Global Note.
(f) Authentication of Definitive Notes in Absence of Depositary. If at
any time:
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(i) the Depositary for the Notes notifies the Company that
the Depositary is unwilling or unable to continue as
Depositary for the Global Notes and a successor
Depositary for the Global Notes is not appointed by
the Company within 90 days after delivery of such
notice; or
(ii) the Company, at its sole discretion, notifies the
Trustee in writing that it elects to cause the
issuance of Definitive Notes under this Indenture,
then the Company shall execute, and the Trustee shall,
upon receipt of an authentication order in accordance
with Section 2.02 hereof, authenticate and deliver,
Definitive Notes in an aggregate principal amount
equal to the principal amount of the Global Notes in
exchange for such Global Notes.
(g) Legends.
(i) Except as permitted by the following paragraphs (ii),
(iii) and (iv), each Note certificate evidencing
Global Notes and Definitive Notes (and all Notes
issued in exchange therefor or substitution thereof)
shall bear legends in substantially the following
form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY
WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED
HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED
HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, OR
IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT,
(b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED
STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT
OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO,
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NOTIFY ANY PURCHASER OF THE SECURITY EVIDENCED HEREBY
OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security
represented by a Global Note) pursuant to Rule 144
under the Securities Act or pursuant to an effective
registration statement under the Securities Act:
(A) in the case of any Transfer Restricted
Security that is a Certificated Note, the
Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Security
for a Certificated Note that does not bear
the legend set forth in (i) above and
rescind any restriction on the transfer of
such Transfer Restricted Security upon
receipt of a certification from the
transferring holder substantially in the
form of Exhibit B-4 hereto; and
(B) in the case of any Transfer Restricted
Security represented by a Global Note, such
Transfer Restricted Security shall not be
required to bear the legend set forth in (i)
above, but shall continue to be subject to
the provisions of Section 2.06(a) and (b)
hereof; provided, however, that with respect
to any request for an exchange of a Transfer
Restricted Security that is represented by a
Global Note for a Certificated Note that
does not bear the legend set forth in (i)
above, which request is made in reliance
upon Rule 144, the Holder thereof shall
certify in writing to the Registrar that
such request is being made pursuant to Rule
144 (such certification to be substantially
in the form of Exhibit B-4 hereto).
(iii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security
represented by a Global Note) in reliance on any
exemption from the registration requirements of the
Securities Act (other than exemptions pursuant to
Rule 144A or Rule 144 under the Securities Act) in
which the Holder or the transferee provides an
Opinion of Counsel to the Company and the Registrar
in form and substance reasonably acceptable to the
Company and the Registrar (which Opinion of Counsel
shall also state that the transfer restrictions
contained in the legend are no longer applicable):
(A) in the case of any Transfer Restricted
Security that is a Certificated Note, the
Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Security
for a Certificated Note that does not bear
the legend set forth in (i) above and
rescind any restriction on the transfer of
such Transfer Restricted Security; and
(B) in the case of any Transfer Restricted
Security represented by a Global Note, such
Transfer Restricted Security shall not be
required to bear the legend set forth in (i)
above, but shall continue to be subject to
the provisions of Section 2.06(a) and (b)
hereof.
(iv) Notwithstanding the foregoing, upon consummation of
the Exchange Offer in accordance with the
Registration Rights Agreement, the Company shall
issue and, upon receipt of an authentication order in
accordance with Section 2.02 hereof,
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the Trustee shall authenticate Exchange Senior Notes
in exchange for Senior Notes accepted for exchange in
the Exchange Offer, which Exchange Senior Notes shall
not bear the legend set forth in (i) above, and the
Registrar shall rescind any restriction on the
transfer of such Exchange Senior Notes, in each case
unless the Holder of such Senior Notes is either (A)
a broker-dealer, (B) a Person participating in the
distribution of the Senior Notes or (C) a Person who
is an affiliate (as defined in Rule 144A) of the
Company.
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in Global Notes have been exchanged for Definitive Notes,
redeemed, repurchased or cancelled, all Global Notes shall be returned to or
retained and cancelled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for Definitive Notes, redeemed, repurchased or cancelled, the
principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note, by the Trustee
or the Notes Custodian, at the direction of the Trustee, to reflect such
reduction.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall
authenticate Definitive Notes and Global Notes at the
Registrar's request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company
may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in
connection therewith (other than any such transfer
taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 3.07, 4.10,
4.15 and 9.05 hereto).
(iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for
redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part.
(iv) All Definitive Notes and Global Notes issued upon any
registration of transfer or exchange of Definitive
Notes or Global Notes shall be the valid obligations
of the Company, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the
Definitive Notes or Global Notes surrendered upon such
registration of transfer or exchange.
(v) The Company shall not be required:
(A) to issue, to register the transfer of or to
exchange Notes during a period beginning at
the opening of business 15 days before the
day of any selection of Notes for redemption
under Section 3.02 hereof and ending at the
close of business on the day of selection;
or
(B) to register the transfer of or to exchange
any Note so selected for redemption in whole
or in part, except the unredeemed portion of
any Note being redeemed in part; or
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(C) to register the transfer of or to exchange a
Note between a record date and the next
succeeding interest payment date.
(vi) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the
Company may deem and treat the Person in whose name
any Note is registered as the absolute owner of such
Note for the purpose of receiving payment of principal
of and interest on such Notes, and neither the
Trustee, any Agent nor the Company shall be affected
by notice to the contrary.
(vii) The Trustee shall authenticate Definitive Notes and
Global Notes in accordance with the provisions of
Section 2.02 hereof.
SECTION 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee, or the Company and
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, the Company shall issue and the Trustee, upon the written
order of the Company signed by two Officers of the Company, shall authenticate a
replacement Note if the Trustee's requirements are met. If required by the
Trustee or the Company, an indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if a Note is replaced. The Company may charge for its
expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
SECTION 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company,
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shall be considered as though not outstanding, except that, for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes that the Trustee knows are so owned
shall be so disregarded.
SECTION 2.10. TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes upon a written order of the
Company signed by two Officers of the Company. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate definitive Notes in exchange for temporary
Notes.
Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
cancelled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all cancelled Notes shall be delivered
to the Company. The Company may not issue new Notes to replace Notes that it has
paid or that have been delivered to the Trustee for cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company shall notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company shall fix or cause to be fixed each such
special record date and payment date, provided that no such special record date
shall be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or, upon
the written request of the Company, the Trustee in the name and at the expense
of the Company) shall mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 30 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Notes to be redeemed and (iv) the redemption price.
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SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time, selection
of Notes for redemption shall be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which the
Notes are listed, or, if the Notes are not so listed, on a pro rata basis, by
lot or by such method as the Trustee shall deem fair and appropriate; provided
that no Notes of $1,000 or less shall be redeemed in part. In the event of
partial redemption by lot, the particular Notes to be redeemed shall be
selected, unless otherwise provided herein, not less than 30 nor more than 60
days prior to the redemption date by the Trustee from the outstanding Notes not
previously called for redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. A new Note in principal amount equal to the
unredeemed portion thereof will be issued in the name of the Holder thereof upon
cancellation of the original Note. On and after the redemption date, interest
ceases to accrue on Notes or portions of them called for redemption. Except as
provided in this Section 3.02, provisions of this Indenture that apply to Notes
called for redemption also apply to portions of Notes called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.09 hereof, at least 30 but not
more than 60 days before the redemption date, the Company shall mail or caused
to be mailed, by first class mail, a notice of redemption to each Holder of
Notes whose Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is to be redeemed in part only, the portion of
the principal amount thereof to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such
redemption payment, interest on Notes called for redemption ceases to
accrue on and after the redemption date;
(g) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being
redeemed; and
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(h) the CUSIP number, provided that no representation is made
as to the correctness or accuracy of the CUSIP number, if any, listed
in such notice or printed on the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
One Business Day prior to the redemption date, the Company shall
deposit with the Trustee or with the Paying Agent money sufficient to pay the
redemption price of, Liquidated Damages, if any, and accrued interest on all
Notes to be redeemed on that date. The Trustee or the Paying Agent shall
promptly return to the Company any money deposited with the Trustee or the
Paying Agent by the Company in excess of the amounts necessary to pay the
redemption price of, and accrued interest on, all Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph,
on and after the redemption date, interest and Liquidated Damages, if any, shall
cease to accrue on the Notes or the portions of Notes called for redemption. If
a Note is redeemed on or after an interest record date but on or prior to the
related interest payment date, then any accrued and unpaid interest shall be
paid to the Person in whose name such Note was registered at the close of
business on such record date. If any Note called for redemption shall not be so
paid upon surrender for redemption because of the failure of the Company to
comply with the preceding paragraph, interest shall be paid on the unpaid
principal, from the redemption date until such principal is paid, and to the
extent lawful on any interest not paid on such unpaid principal, in each case at
the rate provided in the Notes and in Section 4.01 hereof.
SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company shall
issue and, upon the Company's written request, the Trustee shall authenticate
for the Holder at the expense of the Company a new Note equal in principal
amount to the unredeemed portion of the Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
(a) Except as set forth in clause (b) of this Section 3.07, the Company
shall not have the option to redeem the Notes pursuant to this Section 3.07
prior to November 15, 2001. From and after November 15, 2001, the Company shall
have the option to redeem the Notes, in whole or in part upon not less than 30
nor more than 60 days' written notice, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
interest and Liquidated Damages, if any, thereon to the applicable redemption
date, if redeemed during the twelve-month period beginning on November 15 of the
years indicated below:
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YEAR PERCENTAGE
---- ----------
2001................................................... 105.438%
2002................................................... 103.625%
2003................................................... 101.813%
2004 and thereafter.................................... 100.000%
(b) Notwithstanding the provisions of clause (a) of this Section 3.07,
at any time prior to November 15, 1999, the Company may on any one or more
occasions redeem up to 30% of the originally issued principal amount of Notes at
a redemption price equal to 110 7/8% of the principal amount thereof, plus
accrued and unpaid interest and Liquidated Damages, if any, thereon to the
redemption date, with the net proceeds of an initial public offering of common
stock of the Company or of Holdings (to the extent that the proceeds thereof are
contributed to the Company as common equity); provided that at least 70% of the
originally issued principal amount of Notes remains outstanding immediately
after the occurrence of such redemption; and provided, further, that notice of
such redemption shall be given within 30 days of the date of the closing of such
public offering of common stock of the Company.
(c) Any redemption pursuant to this Section 3.07 shall be made pursuant
to the provisions of Section 3.01 through 3.06 hereof.
SECTION 3.08. MANDATORY REDEMPTION.
Except as set forth under Sections 4.10 and 4.15 hereof, the Company
shall not be required to make mandatory redemption payments with respect to the
Notes.
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the Company shall be
required to commence an offer to all Holders to purchase Notes (an "Asset Sale
Offer"), it shall follow the procedures specified in this Section 3.09.
The Asset Sale Offer shall remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by applicable law (the "Offer Period"). No later than five
Business Days after the termination of the Offer Period (the "Purchase Date"),
the Company shall purchase the principal amount of Notes required to be
purchased pursuant to Section 4.10 hereof (the "Offer Amount") or, if less than
the Offer Amount has been tendered, all Notes tendered in response to the Asset
Sale Offer. Payment for any Notes so purchased shall be made in the same manner
as interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest shall
be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company shall send, by
first class mail, a notice to the Trustee and each of the Holders, with a copy
to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Asset Sale
Offer. The Asset Sale Offer shall be made to all Holders. The notice, which
shall govern the terms of the Asset Sale Offer, shall state:
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(a) that the Asset Sale Offer is being made pursuant to this
Section 3.09 and Section 4.10 hereof and the length of time the Asset
Sale Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase
Date;
(c) that any Note not tendered or accepted for payment shall
continue to accrue interest and Liquidated Damages, if any;
(d) that, unless the Company defaults in making such payment,
any Note accepted for payment pursuant to the Asset Sale Offer shall
cease to accrue interest and Liquidated Damages, if any, after the
Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to
an Asset Sale Offer may only elect to have all of such Note purchased
and may not elect to have only a portion of such Note purchased;
(f) that Holders electing to have a Note purchased pursuant to
any Asset Sale Offer shall be required to surrender the Note, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of
the Note completed, or transfer by book-entry transfer, to the Company,
a depositary, if appointed by the Company, or a Paying Agent at the
address specified in the notice at least three Business Days before the
Purchase Date;
(g) that Holders shall be entitled to withdraw their election
if the Company, the depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a
telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Note the Holder
delivered for purchase and a statement that such Holder is withdrawing
his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes
surrendered by Holders exceeds the Offer Amount, the Company shall
select the Notes to be purchased on a pro rata basis (with such
adjustments as may be deemed appropriate by the Company so that only
Notes in denominations of $1,000, or integral multiples thereof, shall
be purchased); and
(i) that Holders whose Notes were purchased only in part shall
be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered (or transferred by book-entry
transfer).
On or before the Purchase Date, the Company shall, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Offer Amount has been tendered, all Notes tendered, and
shall deliver to the Trustee an Officers' Certificate stating that such Notes or
portions thereof were accepted for payment by the Company in accordance with the
terms of this Section 3.09. The Company, the Depositary or the Paying Agent, as
the case may be, shall promptly (but in any case not later than five days after
the Purchase Date) mail or deliver to each tendering Holder an amount equal to
the purchase price of the Notes tendered by such Holder and accepted by the
Company for purchase, and the Company shall promptly issue a new Note, and the
Trustee, upon written request from the Company shall authenticate and mail or
deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall be
promptly mailed or
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delivered by the Company to the Holder thereof. The Company shall publicly
announce the results of the Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Company shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than the Company or a Subsidiary thereof,
holds as of 10:00 a.m. Eastern Time on the due date money deposited by the
Company in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due. The Company shall pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace period) at the same
rate to the extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company shall give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee,
located at 14 Wall Street, 8th Floor, Window #2, New York, NY 10005, as one such
office or agency of the Company in accordance with Section 2.03.
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SECTION 4.03. REPORTS.
Whether or not required by the rules and regulations of the Commission,
so long as any Notes are outstanding, the Company shall furnish to the Trustee
and the Holders of Notes (a) commencing for the fiscal quarter ending December
31, 1996, all quarterly and annual financial information that would be required
to be contained in a filing with the Commission on Forms 10-Q and 10-K if the
Company were required to file such Forms, including a "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and, with respect
to the annual information only, a report thereon by the Company's certified
independent accountants and (b) commencing for the fiscal quarter ending
December 31, 1996, all current reports that would be required to be filed with
the Commission on Form 8-K if the Company were required to file such reports. In
addition, whether or not required by the rules and regulations of the
Commission, the Company shall file a copy of all such information and reports
with the Commission for public availability (unless the Commission will not
accept such a filing) and make such information available to securities analysts
and prospective investors upon request. In addition, for so long as any Notes
remain outstanding, the Company and the Subsidiary Guarantors shall furnish to
the Holders and to securities analysts and prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year, an Officers' Certificate stating that a review of the
activities of the Company and its Subsidiaries during the preceding fiscal year
has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action the Company is
taking or proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of, premium, Liquidated Damages or
interest, if any, on the Notes is prohibited or if such event has occurred, a
description of the event and what action the Company is taking or proposes to
take with respect thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article Four or Article Five hereof or, if any such violation
has occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
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SECTION 4.05. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
Each of the Company and the Guarantors covenants (to the extent that it
may lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and each of the
Company and the Guarantors (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law has been enacted.
SECTION 4.07 RESTRICTED PAYMENTS.
(a) The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, (i) declare or pay any dividend or make any other
payment or distribution on account of the Company's Equity Interests (including,
without limitation, any payment in connection with any merger or consolidation
involving the Company) or to the direct or indirect holders of the Company's
Equity Interests in their capacity as such (other than dividends or
distributions payable in Equity Interests (other than Disqualified Stock) of the
Company or dividends or distributions payable to the Company or any Wholly Owned
Subsidiary of the Company); (ii) purchase, redeem or otherwise acquire or retire
for value any Equity Interests of the Company or any direct or indirect parent
of the Company or other Affiliate of the Company (other than Equity Interests of
a Subsidiary of the Company); (iii) make any principal payment on, or purchase,
redeem, defease or otherwise acquire or retire for value any Indebtedness that
is subordinated to the Notes or any Subsidiary Guarantee thereof, except at
final maturity; or (iv) make any Restricted Investment (all such payments and
other actions set forth in clauses (i) through (iv) above being collectively
referred to as "Restricted Payments"), unless, at the time of and after giving
effect to such Restricted Payment:
(A) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(B) the Company would, at the time of such Restricted Payment
and after giving pro forma effect thereto as if such Restricted Payment
had been made at the beginning of the applicable four-quarter period,
have been permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in Section
4.09(a) hereof; and
(C) such Restricted Payment, together with the aggregate of
all other Restricted Payments made by the Company and its Subsidiaries
after the date of this Indenture (excluding Restricted Payments
permitted by clauses (ii) and (iii) of the next succeeding paragraph),
is less than the sum of (1) 50% of the Consolidated Net Income of the
Company for the period (taken as one accounting period) from the
beginning of the first fiscal quarter commencing after the date
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of this Indenture to the end of the Company's most recently ended
fiscal quarter for which internal financial statements are available at
the time of such Restricted Payment (or, if such Consolidated Net
Income for such period is a deficit, less 100% of such deficit), plus
(2) 100% of the aggregate net cash proceeds received by the Company
from the issue or sale since the date of this Indenture of Equity
Interests of the Company or of debt securities of the Company that have
been converted into such Equity Interests (other than Equity Interests
(or convertible debt securities) sold to a Subsidiary of the Company
and other than Disqualified Stock or debt securities that have been
converted into Disqualified Stock), plus (3) to the extent that any
Restricted Investment that was made after the date of this Indenture is
sold for cash or otherwise liquidated or repaid for cash, the lesser of
(x) the cash return of capital with respect to such Restricted
Investment (less the cost of disposition, if any) and (y) the initial
amount of such Restricted Investment.
(b) The foregoing provisions shall not prohibit (i) the payment of any
dividend within 60 days after the date of declaration thereof, if at said date
of declaration such payment would have complied with the provisions of this
Indenture; (ii) the redemption, repurchase, retirement or other acquisition of
any Equity Interests of the Company in exchange for, or out of the proceeds of,
the substantially concurrent sale (other than to a Subsidiary of the Company) of
other Equity Interests of the Company (other than any Disqualified Stock);
provided that the amount of any such net cash proceeds that are utilized for any
such redemption, repurchase, retirement or other acquisition shall be excluded
from clause (C)(2) of the preceding paragraph; (iii) the defeasance, redemption
or repurchase of subordinated Indebtedness with the net cash proceeds from an
incurrence of Permitted Refinancing Debt or the substantially concurrent sale
(other than to a Subsidiary of the Company) of Equity Interests of the Company
(other than Disqualified Stock); provided that the amount of any such net cash
proceeds that are utilized for any such redemption, repurchase, retirement or
other acquisition shall be excluded from clause (C)(2) of the preceding
paragraph; (iv) the payment of any distribution or dividend to Holdings to
enable Holdings to repurchase, redeem or otherwise acquire or retire for value
of any Equity Interests of Holdings, the Company or any Subsidiary of the
Company held by any member of the Company's (or any of its Subsidiaries')
management pursuant to any management equity subscription agreement or stock
option agreement; provided that the aggregate price paid for all such
repurchased, redeemed, acquired or retired Equity Interests shall not exceed
$500,000 in any twelve-month period plus the aggregate cash proceeds received by
the Company during such twelve-month period from any reissuance of Equity
Interests by the Company to members of management of the Company and its
Subsidiaries; and no Default or Event of Default shall have occurred and be
continuing immediately after such transaction; and (v) payments in an aggregate
amount not to exceed $3.0 million since the date of this Indenture in respect of
the purchase, retirement or redemption of Existing Indebtedness for an amount
less than the face amount thereof.
(c) The amount of all Restricted Payments (other than cash) shall be the
fair market value (evidenced by a resolution of the Board of Directors set forth
in an officers' certificate delivered to the Trustee) on the date of the
Restricted Payment of the asset(s) proposed to be transferred by the Company or
such Subsidiary, as the case may be, pursuant to the Restricted Payment. Not
later than the date of making any Restricted Payment, the Company shall deliver
to the Trustee an Officers' Certificate stating that such Restricted Payment is
permitted and setting forth the basis upon which the calculations required by
this Section 4.07 were computed, which calculations may be based upon the
Company's latest available financial statements.
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SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any Subsidiary to
(a)(i) pay dividends or make any other distributions to the Company or any of
its Subsidiaries (A) on its Capital Stock or (B) with respect to any other
interest or participation in, or measured by, its profits, or (ii) pay any
indebtedness owed to the Company or any of its Subsidiaries, (b) make loans or
advances to the Company or any of its Subsidiaries or (c) transfer any of its
properties or assets to the Company or any of its Subsidiaries, except for such
encumbrances or restrictions existing under or by reason of (i) Existing
Indebtedness as in effect on the date of this Indenture, (ii) the Credit
Agreement as in effect as of the date of this Indenture, and any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings thereof, provided that such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacement or refinancings are no more restrictive with respect to such
dividend and other payment restrictions than those contained in the Credit
Agreement as in effect on the date of this Indenture, (iii) this Indenture and
the Notes, (iv) applicable law, (v) by reason of customary non-assignment
provisions in leases, licenses and other agreements entered into in the ordinary
course of business and consistent with past practices, (vi) purchase money
obligations for property acquired in the ordinary course of business that impose
restrictions of the nature described in clause (c) above on the property so
acquired, or (vii) Permitted Refinancing Debt, provided that the restrictions
contained in the agreements governing such Permitted Refinancing Debt are no
more restrictive than those contained in the agreements governing the
Indebtedness being refinanced.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
(a) The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness (including Acquired Debt) and the
Company shall not issue any Disqualified Stock and shall not permit any of its
Subsidiaries to issue any shares of preferred stock; provided, however, that the
Company may incur Indebtedness (including Acquired Debt), and the Guarantors may
guarantee such Indebtedness, and the Company may issue shares of Disqualified
Stock, if the Fixed Charge Coverage Ratio for the Company's most recently ended
four full fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is incurred
or such Disqualified Stock is issued would have been at least 2.0 to 1,
determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if the additional Indebtedness had been incurred, or the
Disqualified Stock had been issued, as the case may be, at the beginning of such
four-quarter period.
(b) The foregoing provisions shall not apply to: (i) the incurrence by
the Company (and Guarantees thereof by the Guarantors) of Indebtedness for
working capital purposes and letters of credit pursuant to the Credit Agreement
(with letters of credit being deemed to have a principal amount equal to the
maximum potential liability of the Company and its Subsidiaries thereunder) in
an aggregate principal amount not to exceed as of any date of incurrence the
greater of (A) $25.0 million and (B) the amount of the Borrowing Base; (ii) the
incurrence by the Company and its Subsidiaries of the Existing Indebtedness;
(iii) the incurrence by the Company and its Subsidiaries of the Indebtedness
represented by the Notes and the Subsidiary Guarantees; (iv) the incurrence by
the Company or any of its Subsidiaries of Indebtedness represented by Capital
Lease Obligations, mortgage financings or purchase money obligations, in each
case, incurred for the purpose of financing all or any part of the purchase
price or
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cost of construction or improvement of property, plant or equipment used in the
business of the Company or such Subsidiary, in an aggregate principal amount not
to exceed $5.0 million at any time outstanding; (v) the incurrence by the
Company or any of its Subsidiaries of Permitted Refinancing Debt in exchange
for, or the net proceeds of which are used to extend, refinance, renew, replace,
defease or refund, Indebtedness that was permitted by this Indenture to be
incurred; (vi) the incurrence by the Company or any of its Subsidiaries of
intercompany Indebtedness between or among the Company and any of its Wholly
Owned Subsidiaries; provided, however, that (i) if the Company is the obligor on
such Indebtedness, such Indebtedness is expressly subordinate to the payment in
full of all Obligations with respect to the Notes and (ii)(A) any subsequent
issuance or transfer of Equity Interests that results in any such Indebtedness
being held by a Person other than the Company or a Wholly Owned Subsidiary and
(B) any sale or other transfer of any such Indebtedness to a Person that is not
either the Company or a Wholly Owned Subsidiary shall be deemed, in each case,
to constitute an incurrence of such Indebtedness by the Company or such
Subsidiary, as the case may be; (vii) the incurrence by the Company or any of
its Subsidiaries of Hedging Obligations that are incurred for the purpose of
fixing or hedging interest rate risk with respect to any floating rate
Indebtedness that is permitted by the terms of this Indenture to be outstanding;
(viii) the incurrence by the Company or any of its Subsidiaries of Indebtedness
(in addition to Indebtedness permitted by any other clause of this paragraph) in
an aggregate principal amount (or accreted value, as applicable) at any time
outstanding not to exceed $10.0 million; and (ix) the incurrence by the Company
or any of its Subsidiaries of Earn-out Obligations in an aggregate amount not to
exceed $5.0 million at any time outstanding.
(c) For purposes of determining compliance with this Section 4.09, in
the event that an item of Indebtedness meets the criteria of more than one of
the categories of Indebtedness described in clauses (i) through (ix) of the
immediately preceding paragraph, the Company shall, in its sole discretion,
classify such item of Indebtedness in any manner that complies with this Section
4.09 and will only be required to include the amount and type of such
Indebtedness in one of such clauses or pursuant to Section 4.09(a). Accrual of
interest, accretion of accreted value and issuance of securities paid-in-kind
shall not be deemed to be an incurrence of Indebtedness for purposes of this
Section 4.09.
SECTION 4.10. ASSET SALES.
(a) The Company shall not, and shall not permit any of its Subsidiaries
to: (i) sell, lease, convey or other dispose of any assets (including, without
limitation, by way of a sale and leaseback) other than sales of inventory in the
ordinary course of business consistent with past practices (provided that the
sale, lease, conveyance or other disposition of all or substantially all of the
assets of the Company and its Subsidiaries taken as a whole shall be governed by
the provisions of 4.14 and/or 5.01 hereof and not by the provisions of this
Section 4.10), or (ii) issue or sell Equity Interests of any of the Company's
Subsidiaries, in the case of either clause (i) or (ii), whether in a single
transaction or a series of related transactions (A) that have a fair market
value in excess of $1.0 million or (B) for net proceeds in excess of $1.0
million (each of the foregoing, an "Asset Sale"), unless (i) the Company (or the
Subsidiary, as the case may be) receives consideration at the time of such Asset
Sale at least equal to the fair market value (evidenced by a resolution of the
Board of Directors set forth in an Officers' Certificate delivered to the
Trustee) of the assets or Equity Interests issued or sold or otherwise disposed
of and (ii) at least 80% of the consideration therefor received by the Company
or such Subsidiary is in the form of cash; provided that the amount of (x) any
liabilities (as shown on the Company's or such Subsidiary's most recent balance
sheet), of the Company or any Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the Notes or any Guarantee
thereof) that are assumed by the transferee of any such assets pursuant to any
arrangement releasing the Company or such Subsidiary from further liability and
(y) any notes or other obligations received by the Company or any such
Subsidiary
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from such transferee that are immediately converted by the Company or such
Subsidiary into cash (to the extent of the cash received), shall be deemed to be
cash for purposes of this provision. Notwithstanding the foregoing, Asset Sales
shall not be deemed to include (i) a transfer of assets by the Company to a
Wholly Owned Subsidiary that is a Guarantor, or by a Wholly Owned Subsidiary to
the Company or to another Wholly Owned Subsidiary that is a Guarantor, (ii) an
issuance of Equity Interests by a Wholly Owned Subsidiary to the Company or to
another Wholly Owned Subsidiary that is a Guarantor, and (iii) a Restricted
Payment or Permitted Investment that is permitted by the provisions of Section
4.07 hereof.
(b) Within 360 days after the receipt of any Net Proceeds from an Asset
Sale, the Company may apply such Net Proceeds (a) to permanently reduce pari
passu Indebtedness (and to correspondingly reduce commitments with respect
thereto) or (b) to the acquisition of a controlling interest in another
business, the making of a capital expenditure or the acquisition of other
long-term assets, in each case, in the same or a similar line of business as the
Company was engaged in on the date of this Indenture. Pending the final
application of any such Net Proceeds, the Company may temporarily reduce
revolving credit Indebtedness under the Credit Agreement or otherwise invest
such Net Proceeds in any manner that is not prohibited by this Indenture. Any
Net Proceeds from Asset Sales that are not applied or invested as provided in
the first sentence of this paragraph shall be deemed to constitute "Excess
Proceeds." When the aggregate amount of Excess Proceeds exceeds $5.0 million,
the Company shall make an Asset Sale Offer pursuant to Section 3.09 hereof to
purchase the maximum principal amount of Notes that may be purchased out of the
Excess Proceeds, at an offer price in cash in an amount equal to 100% of the
principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the date of purchase, in accordance with the
procedures set forth in Section 3.09 hereof. To the extent that the aggregate
amount of Notes tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Company may use any remaining Excess Proceeds for general
corporate purposes. If the aggregate principal amount of Notes surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select
the Notes to be purchased on a pro rata basis. Upon completion of such offer to
purchase, the amount of Excess Proceeds shall be reset at zero.
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Subsidiaries to,
make any payment to, or sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into
or make or amend any contract, agreement, understanding, loan, advance or
Guarantee with, or for the benefit of, any Affiliate (each of the foregoing, an
"Affiliate Transaction"), unless (i) such Affiliate Transaction is on terms that
are no less favorable to the Company or the relevant Subsidiary than those that
would have been obtained in a comparable transaction by the Company or such
Subsidiary with an unrelated Person and (ii) the Company delivers to the Trustee
(A) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $1.0 million, a
resolution of the Board of Directors set forth in an Officers' Certificate
certifying that such Affiliate Transaction complies with clause (i) above and
that such Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors and (B) with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $5.0 million, an opinion as to the fairness
to the Holders of such Affiliate Transaction from a financial point of view
issued by an accounting, appraisal or investment banking firm of national
standing; provided that (w) the payment of Earn-out Obligations pursuant to
agreements entered into at such time as the recipient of such payments was not
an Affiliate of the Company or such Subsidiary, (x) any employment agreement
entered into by the Company or any of its Subsidiaries in the ordinary course of
business and consistent with the past practice of the Company or such
Subsidiary, (y) transactions between or among the Company and/or its
Subsidiaries and (z) Restricted Payments and Permitted
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Investments that are permitted by the provisions of Section 4.07 hereof, in each
case, shall not be deemed Affiliate Transactions.
SECTION 4.12. LIENS.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or suffer to exist any Lien on any
asset now owned or hereafter acquired, or any income or profits therefrom or
assign or convey any right to receive income therefrom, other than Permitted
Liens.
SECTION 4.13. LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK OF WHOLLY OWNED
SUBSIDIARIES.
The Company (a) shall not, and shall not permit any Wholly Owned
Subsidiary of the Company to, transfer, convey, sell, lease or otherwise dispose
of any Capital Stock of any Wholly Owned Subsidiary of the Company to any Person
(other than the Company or a Wholly Owned Subsidiary of the Company), unless (i)
such transfer, conveyance, sale, lease or other disposition is of all the
Capital Stock of such Wholly Owned Subsidiary and (ii) the Net Proceeds from
such transfer, conveyance, sale, lease or other disposition are applied in
accordance with the provisions of Section 4.10 hereof, provided that this clause
(a) shall not apply to any pledge of Capital Stock of any Subsidiary of the
Company securing Indebtedness under the Credit Agreement, and (b) shall not
permit any Wholly Owned Subsidiary of the Company to issue any of its Equity
Interests (other than, if necessary, shares of its Capital Stock constituting
directors' qualifying shares) to any Person other than to the Company or a
Wholly Owned Subsidiary of the Company.
SECTION 4.14. CORPORATE EXISTENCE.
Subject to Article 5 hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Subsidiaries, in accordance with the respective organizational documents
(as the same may be amended from time to time) of the Company or any such
Subsidiary and (ii) the rights (charter and statutory), licenses and franchises
of the Company and its Subsidiaries; provided, however, that the Company shall
not be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any of its Subsidiaries, if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Subsidiaries,
taken as a whole, and that the loss thereof is not adverse in any material
respect to the Holders of the Notes.
SECTION 4.15. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, the Company shall make
an offer (a "Change of Control Offer") to each Holder to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of each Holder's Notes at
an offer price in cash equal to 101% of the aggregate principal amount thereof,
plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the
date of purchase (the "Change of Control Payment"). The Company shall comply
with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of the Notes as a
result of a Change of Control, and the Company shall not be in violation of this
Indenture by reason of any act required by such rule or other applicable law.
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Within 25 days following any Change of Control, the Company shall mail
a notice to each Holder stating:
(1) that the Change of Control Offer is being made pursuant to
this Section 4.15 and that all Notes tendered will be accepted
for payment;
(2) the purchase price and the purchase date, which shall be at
least 30 but no more than 60 days from the date on which the
Company mails notice of the Change of Control (the "Change of
Control Payment Date");
(3) that any Notes not tendered will continue to accrue interest;
(4) that, unless the Company defaults in the payment of the Change
of Control Payment, all Notes accepted for payment pursuant to
the Change of Control Offer shall cease to accrue interest
after the Change of Control Payment Date;
(5) that Holders electing to have any Notes purchased pursuant to
a Change of Control Offer shall be required to surrender the
Notes, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Notes completed, to the Paying
Agent or Depositary, as applicable, at the address specified
in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election if
the Paying Agent or Depositary, as applicable, receives, not
later than the close of business on the second Business Day
preceding the Change of Control Payment Date, a telegram,
telex, facsimile transmission or letter setting forth the name
of the Holder, the principal amount of Notes delivered for
purchase, and a statement that such Holder is withdrawing his
election to have the Notes purchased; and
(7) that Holders whose Notes are being purchased only in part will
be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered, which
unpurchased portion must be equal to $1,000 in principal
amount or an integral multiple thereof.
(b) On the Change of Control Payment Date, the Company shall, to the
extent lawful, (i) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all Notes
or portions thereof so tendered and (iii) deliver or cause to be delivered to
the Trustee the Notes so accepted together with an Officers' Certificate stating
the aggregate principal amount of Notes or portions thereof being purchased by
the Company. The Paying Agent shall promptly mail to each Holder of Notes so
tendered the Change of Control Payment for such Notes, and the Trustee shall
promptly authenticate and mail (or cause to be transferred by book-entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided that each such new Note shall be in a
principal amount of $1,000 or an integral multiple thereof. The Company shall
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
(c) The Company shall not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer in a
manner, at the times and otherwise
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in compliance with the requirements set forth in this Section 4.15 and such
third party purchases all Notes validly tendered and not withdrawn under such
Change of Control Offer.
SECTION 4.16. SALE AND LEASEBACK TRANSACTIONS.
The Company shall not, and shall not permit any of its Subsidiaries to,
enter into any sale and leaseback transaction; provided that the Company may
enter into a sale and leaseback transaction if (a) the Company could have (i)
incurred Indebtedness in an amount equal to the Attributable Debt relating to
such sale and leaseback transaction pursuant to the Fixed Charge Coverage Ratio
test set forth in Section 4.09(a) hereof and (ii) incurred a Lien to secure such
Indebtedness pursuant to the provisions of Section 4.12 hereof, (b) the gross
cash proceeds of such sale and leaseback transaction are at least equal to the
fair market value (as determined in good faith by the Board of Directors and set
forth in an Officers' Certificate delivered to the Trustee) of the property that
is the subject of such sale and leaseback transaction and (c) the transfer of
assets in such sale and leaseback transaction is permitted by, and the Company
applies the proceeds of such transaction in compliance with, the provisions of
Section 4.10 hereof.
SECTION 4.17 ADDITIONAL SUBSIDIARY GUARANTEES.
If the Company or any of its Subsidiaries shall acquire or create
another domestic Subsidiary after the date of this Indenture, then such newly
acquired or created Subsidiary shall (A) execute and deliver to the Trustee a
Subsidiary Guarantee of the Notes in the form of Exhibit D hereto and a
supplemental indenture substantially in the form of Exhibit E hereto pursuant to
which such Subsidiary shall unconditionally guarantee all of the Company's
obligations under the Notes on the terms set forth in such supplemental
indenture and (B) deliver to the Trustee an Opinion of Counsel, in accordance
with the terms of this Indenture; provided that the foregoing provision shall
not apply to any Subsidiary to the extent that (i) in the opinion of counsel to
the Company, such Subsidiary is unable to execute a Subsidiary Guarantee by
reason of any legal or regulatory prohibition or restriction and (ii) such
Subsidiary is not, directly or indirectly, an obligor under the Credit Agreement
or any other bank facility.
SECTION 4.18. PAYMENTS FOR CONSENT.
The Company nor any of its Subsidiaries shall, directly or indirectly,
pay or cause to be paid any consideration, whether by way of interest, fee or
otherwise, to any Holder of any Notes for or as an inducement to any consent,
waiver or amendment of any of the terms or provisions of this Indenture or the
Notes unless such consideration is offered to be paid or is paid to all Holders
of the Notes that consent, waive or agree to amend in the time frame set forth
in the solicitation documents relating to such consent, waiver or agreement.
SECTION 4.19. FURTHER ASSURANCES.
The Company shall, upon the request of the Trustee, execute and deliver
such further instruments and do such further acts as may be reasonably necessary
or proper to carry out more effectively the provisions of this Indenture.
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ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company shall not consolidate or merge with or into (whether or not
the Company is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions, to another corporation, Person or
entity unless (i) the Company is the surviving corporation or the entity or the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia; (ii) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) or the entity or Person to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made assumes all the Obligations of the Company under the Notes
and this Indenture pursuant to a supplemental indenture in a form reasonably
satisfactory to the Trustee; (iii) immediately after such transaction no Default
or Event of Default exists; and (iv) except in the case of a merger of the
Company with or into a Wholly Owned Subsidiary of the Company, the Company or
the entity or Person formed by or surviving any such consolidation or merger (if
other than the Company), or to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made (A) will have Consolidated
Net Worth immediately after the transaction equal to or greater than the
Consolidated Net Worth of the Company immediately preceding the transaction and
(B) will, at the time of such transaction and after giving pro forma effect
thereto as if such transaction had occurred at the beginning of the applicable
four-quarter period, be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in
Section 4.09(a) hereof.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 5.01 hereof, the successor corporation
formed by such consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; provided, however, that
the predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Notes except in the case of a sale of all of
the Company's assets that meets the requirements of Section 5.01 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(a) the Company defaults in the payment when due of interest
on, or Liquidated Damages, if any, with respect to, the Notes and such
default continues for a period of 30 days;
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(b) the Company defaults in the payment when due of principal
of or premium, if any, on the Notes when the same becomes due and
payable at maturity, upon redemption (including in connection with an
offer to purchase) or otherwise;
(c) the Company fails to comply with any of the provisions of
Section 4.07, 4.09, 4.10 or 4.15 hereof;
(d) the Company fails to observe or perform any other
covenant, representation, warranty or other agreement in this Indenture
or the Notes and the Default continues for the period and after the
notice specified below;
(e) a default occurs under any mortgage, indenture or
instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed by the Company
or any of its Subsidiaries (or payment of which is Guaranteed by the
Company or any of its Subsidiaries), whether such Indebtedness or
Guarantee now exists, or is created after the date of this Indenture,
which default (1) is caused by a failure to pay principal of or premium,
if any, or interest on such Indebtedness on or prior to the expiration
of the grace period provided in such Indebtedness on the date of such
default (a "Payment Default") or (2) results in the acceleration of such
Indebtedness prior to its express maturity and, in each case, the
principal amount of any such Indebtedness, together with the principal
amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated,
aggregates $5.0 million or more;
(f) a final judgment or final judgments for the payment of
money are entered by a court or courts of competent jurisdiction against
the Company or any of its Subsidiaries and such judgment or judgments
remain unpaid and undischarged for a period (during which execution
shall not be effectively stayed) of 60 days, provided that the aggregate
of all such undischarged judgments exceeds $5.0 million;
(g) except as otherwise permitted under the provisions of this
Indenture, any Subsidiary Guarantee is held in any judicial proceeding
to be unenforceable or invalid or ceases for any reason to be in full
force and effect or any Guarantor, or any Person acting on behalf of any
Guarantor, denies or disaffirms its obligations under its Subsidiary
Guarantee;
(h) the Company or any of its Significant Subsidiaries or any
group of Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary pursuant to or within the meaning of Bankruptcy
Law:
(1) commences a voluntary case,
(2) consents to the entry of an order for relief
against it in an involuntary case,
(3) consents to the appointment of a Custodian of it
or for all or substantially all of its property,
(4) makes a general assignment for the benefit of
its creditors, or
(5) generally is not paying its debts as they become
due; or
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(i) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(1) is for relief against the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary,
in an involuntary case;
(2) appoints a Custodian of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary,
or for all or substantially all of the property of the Company
or any of its Significant Subsidiaries or any group of
Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary; or
(3) orders the liquidation of the Company or any of
its Significant Subsidiaries or any group of Subsidiaries
that, taken as a whole, would constitute a Significant
Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days.
The term "Custodian" means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law.
A Default under clause (d) is not an Event of Default until the Company
does not cure the Default within 60 days after receipt of the notice. The notice
must specify the Default, demand that it be remedied and state that the notice
is a "Notice of Default."
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have had
to pay if the Company then had elected to redeem the Notes pursuant to Section
3.07 hereof, an equivalent premium shall also become and be immediately due and
payable to the extent permitted by law upon the acceleration of the Notes. If an
Event of Default occurs prior to November 15, 2001 by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding the prohibition on redemption of the Notes prior to
November 15, 2001, then the premium immediately due and payable for purposes of
this paragraph for each of the years beginning on November 15 of the years set
forth below shall be as set forth in the following table expressed as a
percentage of the amount that would otherwise be due but for the provisions of
this sentence, plus accrued interest, if any, to the date of payment:
Year Percentage
---- ----------
1996 ................................................. 110.875%
1997 ................................................. 109.788%
1998 ................................................. 108.700%
1999 ................................................. 107.613%
2000 ................................................. 106.525%
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SECTION 6.02. ACCELERATION.
If any Event of Default (other than an Event of Default specified in
clause (h) or (i) of Section 6.01 hereof with respect to the Company, any
Significant Subsidiary or any group of Significant Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary) occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all the Notes to be due and payable immediately.
Upon any such declaration, the Notes shall become due and payable immediately.
Notwithstanding the foregoing, if an Event of Default specified in clause (h) or
(i) of Section 6.01 hereof occurs with respect to the Company, any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary, all outstanding Notes shall be due
and payable immediately without further action or notice. The Holders of a
majority in aggregate principal amount of the then outstanding Notes by written
notice to the Trustee may on behalf of all of the Holders rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default (except nonpayment of
principal, interest, premium or Liquidated Damages that has become due solely
because of the acceleration) have been cured or waived.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal, premium, if any, and
interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default or Event of Default and its consequences
hereunder, except a continuing Default or Event of Default in the payment of
interest on, premium or Liquidated Damages, in any, or the principal of, the
Notes (including in connection with an offer to purchaser) (provided, however,
that the Holders of a majority in aggregate principal amount of the then
outstanding Notes may rescind an acceleration and its consequences, including
any related payment default that resulted from such acceleration). Upon any such
waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding Notes
may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in personal liability.
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SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this Indenture
or the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice
of a continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the
then outstanding Notes make a written request to the Trustee to pursue
the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee
against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60
days after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(e) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give the Trustee
a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights
of another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount of
principal of, premium and Liquidated Damages, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders,
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to pay to the Trustee any amount due to it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof. To the extent that
the payment of any such compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder, or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts
due under Section 7.07 hereof, including payment of all compensation,
expense and liabilities incurred, and all advances made, by the Trustee
and the costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium and Liquidated Damages, if any, and
interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal,
premium and Liquidated Damages, if any and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder of a
Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
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ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by
the express provisions of this Indenture and the Trustee need perform
only those duties that are specifically set forth in this Indenture and
no others, and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
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SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed by it
to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the Commission
for permission to continue as trustee or resign. Any Agent may do the same with
like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11
hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
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SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
actually known to the Trustee, the Trustee shall mail to Holders of Notes a
notice of the Default or Event of Default within 90 days after it occurs. Except
in the case of a Default or Event of Default in payment of principal of,
premium, if any, or interest on any Note, the Trustee may withhold the notice if
and so long as a committee of its Responsible Officers in good faith determines
that withholding the notice is in the interests of the Holders of the Notes.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA ss. 313(a) (but if no event described in
TIA ss. 313(a) has occurred within the twelve months preceding the reporting
date, no report need be transmitted). The Trustee also shall comply with TIA ss.
313(b)(2). The Trustee shall also transmit by mail all reports as required by
TIA ss. 313(c).
A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Company and filed with the Commission and each
stock exchange on which the Notes are listed in accordance with TIA ss. 313(d).
The Company shall promptly notify the Trustee when the Notes are listed on any
stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it (including reasonable fees and expenses of counsel) in addition to
the compensation for its services. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify and hold harmless the Trustee against any
and all losses, liabilities or expenses incurred by it arising out of or in
connection with the acceptance or administration of its duties under this
Indenture, including the costs and expenses of enforcing this Indenture against
the Company (including this Section 7.07) and defending itself against any claim
(whether asserted by the Company or any Holder or any other person) or liability
in connection with the exercise or performance of any of its powers or duties
hereunder, except to the extent any such loss, liability or expense may be
attributable to its negligence or bad faith. The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder. The Company shall defend the claim and the Trustee shall
cooperate in the defense. The Trustee may have separate counsel and the Company
shall pay the reasonable fees and expenses of such counsel. The Company need not
pay for any settlement made without its consent, which consent shall not be
unreasonably withheld.
The obligations of the Company under this Section 7.07 shall survive
the satisfaction and discharge of this Indenture.
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To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(h) or (i) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA ss. 313(b)(2) to
the extent applicable.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of Notes of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee
or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Notes of at least 10% in principal amount of the then outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee, after written request by any Holder of a Note who has
been a Holder of a Note for at least six months, fails to comply with Section
7.10, such Holder of a Note may petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The
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retiring Trustee shall promptly transfer all property held by it as Trustee to
the successor Trustee, provided all sums owing to the Trustee hereunder have
been paid and subject to the Lien provided for in Section 7.07 hereof.
Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the
Company's obligations under Section 7.07 hereof shall continue for the benefit
of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee.
SECTION 7.10. ELIGIBILITY, DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100 million
as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1),(2) and (5). The Trustee is subject to TIA ss.
310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article Eight.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Notes on the
date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company shall be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes, which shall thereafter be deemed to be "outstanding" only for
the purposes of Section 8.05 hereof and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged
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hereunder: (a) the rights of Holders of outstanding Notes to receive solely from
the trust fund described in Section 8.04 hereof, and as more fully set forth in
such Section, payments in respect of the principal of, premium, if any, and
interest on such Notes when such payments are due, (b) the Company's obligations
with respect to such Notes under Article 2 and Section 4.02 hereof, (c) the
rights, powers, trusts, duties and immunities of the Trustee hereunder and the
Company's obligations in connection therewith and (d) this Article Eight.
Subject to compliance with this Article Eight, the Company may exercise its
option under this Section 8.02 notwithstanding the prior exercise of its option
under Section 8.03 hereof.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from its
obligations under the covenants contained in Sections 4.07, 4.08, 4.09, 4.10,
4.11, 4.12, 4.13, 4.15, 4.16 and 4.18 hereof with respect to the outstanding
Notes on and after the date the conditions set forth below are satisfied
(hereinafter, "Covenant Defeasance"), and the Notes shall thereafter be deemed
not "outstanding" for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder (it being understood that such Notes shall not
be deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes, the Company may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.01 hereof, but, except as specified
above, the remainder of this Indenture and such Notes shall be unaffected
thereby. In addition, upon the Company's exercise under Section 8.01 hereof of
the option applicable to this Section 8.03 hereof, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, Sections 6.01(d) through
6.01(f) hereof shall not constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, cash in United States dollars,
non-callable Government Securities, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to pay the principal
of, premium, if any, and interest and Liquidated Damages, if any, on
the outstanding Notes on the stated date for payment thereof or on the
applicable redemption date, as the case may be, and the Company must
specify whether the Notes are being defeased to maturity or to a
particular redemption date;
(b) in the case of an election under Section 8.02 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in
the United States reasonably acceptable to the Trustee confirming that
(A) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (B) since the date of this
Indenture, there has been a change
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in the applicable federal income tax law, in either case to the effect
that, and based thereon such Opinion of Counsel shall confirm that, the
Holders of the outstanding Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in
the United States reasonably acceptable to the Trustee confirming that
the Holders of the outstanding Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such Covenant
Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event
of Default resulting from the borrowing of funds to be applied to such
deposit) or insofar as Sections 6.01(h) or 6.01(i) hereof is concerned,
at any time in the period ending on the 91st day after the date of
deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under, any
material agreement or instrument (other than this Indenture) to which
the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an opinion
of counsel to the effect that after the 91st day following the deposit,
the trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally;
(g) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the
Company with the intent of preferring the Holders of Notes over the
other creditors of the Company with the intent of defeating, hindering,
delaying or defrauding creditors of the Company or others; and
(h) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for or relating to the Legal Defeasance
or the Covenant Defeasance have been complied with.
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest,
including Liquidated Damages, if any, but such money need not be segregated from
other funds except to the extent required by law.
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The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or non-callable Government Securities held by it as
provided in Section 8.04 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under
Section 8.04(a) hereof), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
SECTION 8.06. REPAYMENT TO COMPANY
Subject to Section 7.07 hereof, any money deposited with the Trustee or
any Paying Agent, or then held by the Company, in trust for the payment of the
principal of, premium or Liquidated Damages, if any, or interest on any Note and
remaining unclaimed for two years after such principal, and premium or
Liquidated Damages, if any, or interest has become due and payable shall be paid
to the Company on its request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter, as a
secured creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Company cause to be
published once, in the New York Times and The Wall Street Journal (national
edition), notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
notification or publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.02 or 8.03
hereof, as the case may be; provided, however, that, if the Company makes any
payment of principal of, premium or Liquidated Damages, if any, or interest on
any Note following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 of this Indenture, the Company and the
Trustee may amend or supplement this Indenture or the Notes without the consent
of any Holder of a Note:
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(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(c) to provide for the assumption of the Company's obligations
to Holders of the Notes in the case of a merger or consolidation
pursuant to Article Five hereof;
(d) to make any change that would provide any additional
rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights hereunder of any Holder of the Notes;
or
(e) to comply with requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the TIA.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee shall join with the Company in the execution of any
amended or supplemental Indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations that
may be therein contained, but the Trustee shall not be obligated to enter into
such amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture and the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in principal
amount of the Notes then outstanding (including, without limitation, consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, Notes), and any existing Default or Event of Default or compliance with any
provision of this Indenture or the Notes may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Notes
(including consents obtained in connection with a tender offer or exchange offer
for the Notes). Notwithstanding the foregoing, without the consent of at least
75% in principal amount of the Notes then outstanding (including consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, Notes), no waiver or amendment to this Indenture may make any change in the
provisions of Section 3.09, 4.10 or 4.15 hereof that adversely affects the
rights of any Holder of Notes.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee shall
join with the Company in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion, but shall not be obligated to, enter into such
amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
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After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the Notes then outstanding may waive
compliance in a particular instance by the Company with any provision of this
Indenture or the Notes. However, without the consent of each Holder affected, an
amendment or waiver may not (with respect to any Notes held by a non-consenting
Holder):
(a) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of
any Note or alter the provisions with respect to the redemption of the
Notes (except as provided above with respect to Sections 3.09, 4.10 and
4.15 hereof);
(c) reduce the rate of or change the time for payment of
interest, including default interest, on any Note;
(d) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the Notes (except a
rescission of acceleration of the Notes by the Holders of at least a
majority in aggregate principal amount of the then outstanding Notes
and a waiver of the payment default that resulted from such
acceleration);
(e) make any Note payable in money other than that stated in
the Notes;
(f) make any change in the provisions of this Indenture
relating to waivers of past Defaults or the rights of Holders of Notes
to receive payments of principal of or premium, if any, or interest on
the Notes;
(g) waive a redemption payment with respect to any Note
(except as provided above with respect to Sections 3.09, 4.10 or 4.15
hereof); or
(h) make any changes in the foregoing amendment and waiver
provisions.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in an amended or supplemental Indenture that complies with the TIA as
then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
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SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article Nine if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amendment or supplemental Indenture until the Board of Directors
approves it. In executing any amended or supplemental indenture, the Trustee
shall be entitled to receive and (subject to Section 7.01) shall be fully
protected in relying upon, an Officer's Certificate and an Opinion of Counsel
stating that the execution of such amended or supplemental indenture is
authorized or permitted by this Indenture.
ARTICLE 10
SUBSIDIARY GUARANTEES
SECTION 10.01. SUBSIDIARY GUARANTEES.
Each of the Guarantors hereby, jointly and severally, unconditionally
guarantees to each Holder of a Note authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, irrespective of the validity
and enforceability of this Indenture, the Notes or the obligations of the
Company hereunder or thereunder, that: (a) the principal of and premium and
interest, including Liquidated Damages, if any, on the Notes shall be promptly
paid in full when due, whether at maturity, by acceleration, redemption or
otherwise, and interest on the overdue principal of and interest on premium and
interest, including Liquidated Damages, on the Notes, if any, if lawful, and all
other obligations of the Company to the Holders or the Trustee hereunder or
thereunder shall be promptly paid in full or performed, all in accordance with
the terms hereof and thereof; and (b) in case of any extension of time of
payment or renewal of any Notes or any of such other obligations, that the same
shall be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by acceleration
or otherwise. Failing payment when due of any amount so guaranteed or any
performance so guaranteed for whatever reason, the Guarantors shall be jointly
and severally obligated to pay the same immediately. The Guarantors hereby agree
that their obligations hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of the Notes or this Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder
with respect to any provisions hereof or thereof, the recovery of any judgment
against the Company, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
guarantor. Each Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever and covenant that this Subsidiary
Guarantee shall not be discharged except by complete performance of the
obligations contained in the Notes and this Indenture. If any Holder or the
Trustee is required by any court or otherwise to return to the Company or
Guarantors, or any Custodian, Trustee, liquidator or other
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similar official acting in relation to either the Company or Guarantors, any
amount paid by either to the Trustee or such Holder, this Subsidiary Guarantee,
to the extent theretofore discharged, shall be reinstated in full force and
effect. Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders of Notes in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed hereby.
Each Guarantor further agrees that, as between the Guarantors, on the one hand,
and the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 for
the purposes of this Subsidiary Guarantee, notwithstanding any stay, injunction
or other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby and (y) in the event of any declaration of acceleration of
such obligations as provided in Article 6, such obligations (whether or not due
and payable) shall forthwith become due and payable by the Guarantors for the
purpose of this Subsidiary Guarantee. The Guarantors shall have the right to
seek contribution from any non-paying Guarantor so long as the exercise of such
right does not impair the rights of the Holders under the Subsidiary Guarantees.
SECTION 10.02. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEES.
To evidence its Subsidiary Guarantee set forth in Section 10.01, each
Guarantor hereby agrees that this Indenture shall be executed on behalf of such
Guarantor by its President or one of its Vice Presidents and, to the extent not
a party to this Indenture on the date hereof, each Guarantor shall execute and
deliver to the Trustee a Subsidiary Guarantee in the form of Exhibit D hereto
and a supplemental indenture substantially in the form of Exhibit E hereto,
pursuant to which such Subsidiary shall become a Guarantor under this Article 10
and shall guarantee the Obligations of the Company under this Indenture and the
Notes. Concurrently with the execution and delivery of such Subsidiary Guarantee
and such supplemental indenture, such Guarantor shall deliver to the Trustee an
Opinion of Counsel that the foregoing have been duly authorized, executed and
delivered by such Guarantor and that such Guarantor's Subsidiary Guarantee is a
valid and legally binding obligation of such Guarantor, enforceable against such
Guarantor in accordance with its terms.
If an Officer whose signature is on this Indenture or on a Subsidiary
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee shall
be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Subsidiary Guarantee set
forth in this Indenture on behalf of the Guarantors.
SECTION 10.03. GUARANTORS MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.
No Guarantor may consolidate with or merge with or into (whether or not
such Guarantor is the surviving Person), another corporation, Person or entity
(other than the Company or another Guarantor) unless:
(a) subject to the provisions of Section 10.04 hereof, the
Person formed by or surviving any such consolidation or merger (if
other than such Guarantor) assumes all the obligations of such
Guarantor under the Notes and this Indenture pursuant to a supplemental
indenture, in form and substance reasonably satisfactory to the
Trustee;
(b) immediately after giving effect to such transaction, no
Default or Event of Default exists;
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(c) such Guarantor, or any Person formed by or surviving any
such consolidation or merger, would have Consolidated Net Worth
(immediately after giving effect to transaction), equal to or greater
than the Consolidated Net Worth of such Guarantor immediately preceding
the transaction; and
(d) the Company would be permitted immediately after giving
effect to such transaction, to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth
in Section 4.09 hereof.
Notwithstanding the foregoing, no Guarantor shall be permitted to consolidate
with or merge with or into (whether or not such Guarantor is the surviving
Person), another corporation, Person or entity pursuant to the preceding
sentence if such consolidation or merger would not be permitted by Section 5.01
hereof.
In case of any such consolidation or merger and upon the assumption by
the successor corporation, by supplemental indenture, executed and delivered to
the Trustee and satisfactory in form to the Trustee, of the Subsidiary Guarantee
endorsed upon the Notes and the due and punctual performance of all of the
covenants and conditions of this Indenture to be performed by the Guarantor,
such successor corporation shall succeed to and be substituted for the Guarantor
with the same effect as if it had been named herein as a Guarantor. Such
successor corporation thereupon may cause to be signed any or all of the
Subsidiary Guarantees to be endorsed upon all of the Notes issuable hereunder
which theretofore shall not have been signed by the Company and delivered to the
Trustee. All the Subsidiary Guarantees so issued shall in all respects have the
same legal rank and benefit under this Indenture as the Subsidiary Guarantees
theretofore and thereafter issued in accordance with the terms of this Indenture
as though all of such Subsidiary Guarantees had been issued at the date of the
execution hereof.
Except as set forth in Articles 4 and 5 hereof, nothing contained in
this Indenture or in any of the Notes shall prevent any consolidation or merger
of a Guarantor with or into the Company, or shall prevent any sale or conveyance
of the property of a Guarantor as an entirety or substantially as an entirety to
the Company.
SECTION 10.04. RELEASES OF SUBSIDIARY GUARANTEES.
In the event of (i) a sale or other disposition of all of the assets of
any Guarantor, by way of merger, consolidation or otherwise, (ii) a sale or
other disposition of all of the capital stock of any Guarantor or (iii) a
distribution of all of the capital stock of any Guarantor to stockholders of the
Company in a transaction that complies with the provisions of Section 4.07
hereof, such Guarantor (in the event of a sale or other disposition, by way of
such a merger, consolidation, distribution or otherwise, of all of the capital
stock of such Guarantor) or the corporation acquiring the property (in the event
of a sale or other disposition of all of the assets of such Guarantor) will be
released and relieved of any obligations under its Subsidiary Guarantee;
provided that the Net Proceeds of such sale or other disposition shall be
applied in accordance with the provisions of Section 4.10 hereof. Upon delivery
by the Company to the Trustee of an Officers' Certificate and an Opinion of
Counsel to the effect that such sale or other disposition was made by the
Company in accordance with the provisions of this Indenture, including without
limitation Section 4.10, the Trustee shall execute any documents reasonably
required in order to evidence the release of any Guarantor from its obligations
under its Subsidiary Guarantee.
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Any Guarantor not released from its obligations under its Subsidiary
Guarantee shall remain liable for the full amount of principal of and interest
on the Notes and for the other obligations of any Guarantor under this Indenture
as provided in this Article 10.
SECTION 10.05. LIMITATION ON GUARANTOR LIABILITY.
For purposes hereof, each Guarantor's liability shall be that amount
from time to time equal to the aggregate liability of such Guarantor thereunder,
but shall be limited to the lesser of (i) the aggregate amount of the
Obligations of the Company under the Notes and this Indenture and (ii) the
amount, if any, which would not have (A) rendered such Guarantor "insolvent" (as
such term is defined in the federal Bankruptcy Law and in the Debtor and
Creditor Law of the State of New York) or (B) left it with unreasonably small
capital at the time its Subsidiary Guarantee of the Notes was entered into,
after giving effect to the incurrence of existing Indebtedness immediately prior
to such time; provided that, it shall be a presumption in any lawsuit or other
proceeding in which such Guarantor is a party that the amount guaranteed
pursuant to its Subsidiary Guarantee is the amount set forth in clause (i) above
unless any creditor, or representative of creditors of such Guarantor, or debtor
in possession or trustee in bankruptcy of such Guarantor, otherwise proves in
such a lawsuit that the aggregate liability of such Guarantor is limited to the
amount set forth in clause (ii). In making any determination as to the solvency
or sufficiency of capital of a Guarantor in accordance with the previous
sentence, the right of such Guarantor to contribution from other Guarantors and
any other rights such Guarantor may have, contractual or otherwise, shall be
taken into account.
SECTION 10.06. "TRUSTEE" TO INCLUDE PAYING AGENT.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article 10 shall in such case (unless the context shall
otherwise require) be construed as extending to and including such Paying Agent
within its meaning as fully and for all intents and purposes as if such Paying
Agent were named in this Article 10 in place of the Trustee.
SECTION 10.07 PRIORITY OF SUBSIDIARY GUARANTEE.
The Subsidiary Guarantees rank pari passu in right of payment with all
existing and future senior Indebtedness of the Guarantors, including the
obligations of the Guarantors under the Credit Agreement and any successor
credit facility. For the purposes of the foregoing sentence, the Trustee and the
Holders shall have the right to receive and/or retain payments by any of the
Guarantors only at such times as they may receive and/or retain payments in
respect of the Notes pursuant to this Indenture, including Article 10 hereof.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA ss.318(c), the imposed duties shall control.
58
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SECTION 11.02. NOTICES.
Any notice or communication by the Company or the Trustee to the others
is duly given if in writing and delivered in Person or mailed by first class
mail (registered or certified, return receipt requested), telex, telecopier or
overnight air courier guaranteeing next day delivery, to the others' address:
If to the Company:
Dollar Financial Group, Inc.
1436 Lancaster Avenue, Suite 21
Berwyn, Pennsylvania 19312
Telecopier No.: (610) 296-7844
Attention: Chief Financial Officer
With a copy to:
Weil, Gotshal & Manges
767 Fifth Avenue
New York, New York 10153
Telecopier No.: (212) 310-8007
Attention: Stephen M. Besen, Esq.
If to the Trustee:
Fleet National Bank
777 Main Street, CT/MO/0238
Hartford, CT 06115
Telecopier No.: (860) 986-7920
Attention: Corporate Trust Administration
With a copy to:
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
225 Asylum Street
Hartford, CT 06103
Telecopier No.: (860) 293-3555
Attention: Kevin P. Mallery, Esq.
The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.
59
<PAGE>
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA ss. 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 11.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA ss.
312(c).
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 11.05 hereof) stating that, in the opinion of the
signers, all conditions precedent and covenants, if any, provided for
in this Indenture relating to the proposed action have been satisfied;
and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 11.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been
satisfied.
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA ss. 314(a)(4)) shall comply with the provisions of TIA ss.
314(e) and shall include:
(a) a statement that the Person making such certificate or
opinion has read and understands such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been satisfied; and
60
<PAGE>
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
SECTION 11.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 11.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No director, officer, employee, incorporator or stockholder of the
Company, as such, shall have any liability for any obligations of the Company
under the Notes, this Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of Notes by accepting
a Note waives and releases all such liability. The waiver and release are part
of the consideration for issuance of the Notes. Such waiver may not be effective
to waive liabilities under the federal securities laws and it is the view of the
Commission that such a waiver is against public policy.
SECTION 11.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES.
SECTION 11.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture and the Subsidiary Guarantees.
SECTION 11.10. SUCCESSORS.
All agreements of the Company and each Guarantor in this Indenture and
the Notes shall bind its successors. All agreements of the Trustee in this
Indenture shall bind its successors.
SECTION 11.11. SEVERABILITY.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 11.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
61
<PAGE>
SECTION 11.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
[Signatures on following pages]
62
<PAGE>
SIGNATURES
Dated as of November 15, 1996 DOLLAR FINANCIAL GROUP, INC.
By: /s/ Donald Gayhardt
------------------------------
Donald Gayhardt
Executive Vice President
ALBUQUERQUE INVESTMENTS, INC.
By: /s/ Donald Gayhardt
------------------------------
Donald Gayhardt
Executive Vice President
ANY KIND CHECK CASHING CENTERS, INC.
By: /s/ Donald Gayhardt
------------------------------
Donald Gayhardt
Executive Vice President
CHECK MART OF LOUISIANA, INC.
By: /s/ Donald Gayhardt
------------------------------
Donald Gayhardt
Executive Vice President
CHECK MART OF NEW JERSEY, INC.
By: /s/ Donald Gayhardt
------------------------------
Donald Gayhardt
Executive Vice President
63
<PAGE>
CHECK MART OF NEW MEXICO, INC.
By: /s/ Donald Gayhardt
------------------------------
Donald Gayhardt
Executive Vice President
CHECK MART OF PENNSYLVANIA, INC.
By: /s/ Donald Gayhardt
------------------------------
Donald Gayhardt
Executive Vice President
CHECK MART OF TEXAS, INC.
By: /s/ Donald Gayhardt
------------------------------
Donald Gayhardt
Executive Vice President
CHECK MART OF UTAH, INC.
By: /s/ Donald Gayhardt
------------------------------
Donald Gayhardt
Secretary
CHECK MART OF WASHINGTON, INC.
By: /s/ Donald Gayhardt
------------------------------
Donald Gayhardt
Secretary
64
<PAGE>
CHECK MART OF WASHINGTON, D.C., INC.
By: /s/ Donald Gayhardt
------------------------------
Donald Gayhardt
Executive Vice President
CHECK MART OF WISCONSIN, INC.
By: /s/ Donald Gayhardt
------------------------------
Donald Gayhardt
Executive Vice President
DFG WAREHOUSING CO., INC.
By: /s/ Donald Gayhardt
------------------------------
Donald Gayhardt
Executive Vice President
DOLLAR FINANCIAL INSURANCE CORP.
By: /s/ Donald Gayhardt
------------------------------
Donald Gayhardt
Executive Vice President
DOLLAR INSURANCE ADMINISTRATION CORP.
By: /s/ Donald Gayhardt
------------------------------
Donald Gayhardt
Executive Vice President
65
<PAGE>
FINANCIAL EXCHANGE COMPANY OF MICHIGAN, INC.
By: /s/ Donald Gayhardt
------------------------------
Donald Gayhardt
Executive Vice President
FINANCIAL EXCHANGE COMPANY OF OHIO, INC.
By: /s/ Donald Gayhardt
------------------------------
Donald Gayhardt
Executive Vice President
FINANCIAL EXCHANGE COMPANY OF PENNSYLVANIA, INC.
By: /s/ Donald Gayhardt
------------------------------
Donald Gayhardt
Executive Vice President
FINANCIAL EXCHANGE COMPANY OF PITTSBURGH, INC.
By: /s/ Donald Gayhardt
------------------------------
Donald Gayhardt
Executive Vice President
FINANCIAL EXCHANGE COMPANY OF VIRGINIA, INC.
By: /s/ Donald Gayhardt
------------------------------
Donald Gayhardt
Executive Vice President
66
<PAGE>
L.M.S. DEVELOPMENT CORPORATION
By: /s/ Donald Gayhardt
------------------------------
Donald Gayhardt
Executive Vice President
MONETARY MANAGEMENT CORP.
By: /s/ Donald Gayhardt
------------------------------
Donald Gayhardt
Secretary
MONETARY MANAGEMENT CORPORATION OF
PENNSYLVANIA
By: /s/ Donald Gayhardt
------------------------------
Donald Gayhardt
Executive Vice President
MONETARY MANAGEMENT OF CALIFORNIA, INC.
By: /s/ Donald Gayhardt
------------------------------
Donald Gayhardt
Executive Vice President
MONETARY MANAGEMENT OF MARYLAND, INC.
By: /s/ Donald Gayhardt
------------------------------
Donald Gayhardt
Executive Vice President
67
<PAGE>
MONETARY MANAGEMENT OF NEW YORK, INC.
By: /s/ Donald Gayhardt
------------------------------
Donald Gayhardt
Executive Vice President
PACIFIC RING ENTERPRISES, INC.
By: /s/ Donald Gayhardt
------------------------------
Donald Gayhardt
Executive Vice President
U.S. CHECK EXCHANGE LIMITED PARTNERSHIP
By: ANY KIND CHECK CASHING CENTERS, INC.,
as general partner
By: /s/ Donald Gayhardt
------------------------------
Donald Gayhardt
Executive Vice President
68
<PAGE>
Dated as of November 15, 1996 FLEET NATIONAL BANK
as Trustee
By:/s/ Frank McDonald
---------------------
Frank McDonald
Vice President
<PAGE>
EXHIBIT A-1
(Face of Note)
================================================================================
10 7/8% Senior Notes due 2006
CUSIP 256666AA6
No. $________
DOLLAR FINANCIAL GROUP, INC.
promises to pay to
or registered assigns,
the principal sum of
____________ Dollars on November 15, 2006.
Interest Payment Dates: May 15, and November 15
Record Dates: May 1 and November 1
Dated: November 15, 1996
DOLLAR FINANCIAL GROUP, INC.
By:____________________________
Name:
Title:
This is one of the Notes
referred to in the
within-mentioned Indenture:
FLEET NATIONAL BANK,
as Trustee
By:_________________________________
================================================================================
A-1-1
<PAGE>
(Back of Note)
10 7/8% Senior Note due 2006
[UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.](1)
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(A) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, OR IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT, (B) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (C)
OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (D) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY
OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
- --------
(1) This paragraph should be included only if the Note is issued in global form.
A-1-2
<PAGE>
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY EVIDENCED
HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. INTEREST. Dollar Financial Group, Inc., a New York corporation (the
"Company"), promises to pay interest on the principal amount of this Note at
10 7/8% per annum from November 15, 1996 until maturity and shall pay the
Liquidated Damages payable pursuant to Section 5 of the Registration Rights
Agreement referred to below. The Company will pay interest and Liquidated
Damages semi-annually on May 15 and November 15 of each year, or if any such day
is not a Business Day, on the next succeeding Business Day (each an "Interest
Payment Date"). Interest on the Notes will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of
issuance; provided that if there is no existing Default in the payment of
interest, and if this Note is authenticated between a record date referred to on
the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date shall be May 15, 1997. The Company shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at a rate that is 1% per annum in excess of the rate then in effect; it
shall pay interest (including postpetition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages
(without regard to any applicable grace periods) from time to time on demand at
the same rate to the extent lawful. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Notes (except
defaulted interest) and Liquidated Damages, if any, to the Persons who are
registered Holders of Notes at the close of business on May 1 or November 1 next
preceding the Interest Payment Date, even if such Notes are cancelled after such
record date and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Indenture with respect to defaulted interest. The Notes will
be payable as to principal, premium, interest and Liquidated Damages, if any, at
the office or agency of the Company maintained for such purpose within or
without the City and State of New York, or, at the option of the Company,
payment of interest and Liquidated Damages, if any, may be made by check mailed
to the Holders at their addresses set forth in the register of Holders, provided
that all payments with respect to Notes the Holders of which have given wire
transfer instructions to the Company will be required to be made by wire
transfer of immediately available funds to the accounts specified by the Holders
thereof. Such payment shall be in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts.
3. PAYING AGENT AND REGISTRAR. Initially, Fleet National Bank, the
Trustee under the Indenture, will act as Paying Agent and Registrar. The Company
may change any Paying Agent or Registrar without notice to any Holder. The
Company or any of its Subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued the Notes under an Indenture dated as
of November 15, 1996 ("Indenture") among the Company, the Guarantors and the
Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code ss.ss. 77aaa-77bbbb). The Notes are subject to all such
terms, and Holders are referred to the Indenture and such Act for a statement of
such terms. The Notes are unsecured obligations of the Company limited to $110.0
million in aggregate principal amount.
A-1-3
<PAGE>
5. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph 5, the
Company shall not have the option to redeem the Notes prior to November 15,
2001. Thereafter, the Notes will be subject to redemption at the option of the
Company, in whole or in part, upon not less than 30 nor more than 60 days'
written notice, at the redemption prices (expressed as percentages of principal
amount) set forth below, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the applicable redemption date, if redeemed during
the twelve-month period beginning on November 15 of the years indicated below:
YEAR PERCENTAGE
---- ----------
2001............................................... 105.438%
2002............................................... 103.625%
2003............................................... 101.813%
2004 and thereafter................................ 100.000%
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, at any time prior to November 15, 1999, the Company may on any one
or more occasions redeem up to 30% of the originally issued principal amount of
Notes at a redemption price equal to 110 7/8% of the principal amount thereof,
plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the
redemption date, with the net proceeds of an initial public offering of common
stock of the Company or of Holdings (to the extent that the proceeds thereof are
contributed to the Company as common equity); provided that at least 70% of the
originally issued principal amount of Notes remains outstanding immediately
after the occurrence of such redemption; and provided, further, that notice of
such redemption shall be given within 30 days of the date of the closing of such
public offering of common stock of the Company.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company shall not be
required to make mandatory redemption payments with respect to the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, the Company shall make
an offer (a "Change of Control Offer") to each Holder to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of each Holder's Notes at
an offer price in cash equal to 101% of the aggregate principal amount thereof,
plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the
date of purchase (the "Change of Control Payment"). Within 25 days following any
Change of Control, the Company shall mail a notice to each Holder setting forth
the procedures governing the Change of Control Offer as required by the
Indenture.
(b) If the Company or a Subsidiary consummates any Asset Sales, when
the aggregate amount of Excess Proceeds exceeds $5.0 million, the Company shall
make an Asset Sale Offer pursuant to Section 3.09 of the Indenture to purchase
the maximum principal amount of Notes that may be purchased out of the Excess
Proceeds, at an offer price in cash in an amount equal to 100% of the principal
amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any,
thereon to the date of purchase, in accordance with the procedures set forth in
Section 3.09 hereof. To the extent that the aggregate amount of Notes tendered
pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company
A-1-4
<PAGE>
may use any remaining Excess Proceeds for general corporate purposes. If the
aggregate principal amount of Notes surrendered by Holders thereof exceeds the
amount of Excess Proceeds, the Trustee shall select the Notes to be purchased on
a pro rata basis. Upon completion of such offer to purchase, the amount of
Excess Proceeds shall be reset at zero. Holders of Notes that are the subject of
an offer to purchaser will receive an Asset Sale Offer from the Company prior to
any related purchase date and may elect to have such Notes purchased by
completing the form entitled "Option of Holder to Elect Purchase."
8. NOTICE OF REDEMPTION. Notice of redemption shall be mailed by first
class mail at least 30 days but not more than 60 days before the redemption date
to each Holder of Notes to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date, interest ceases to accrue on Notes
or portions of them called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company is not required to transfer or exchange
any Note selected for redemption, except for the unredeemed portion of any Note
being redeemed in part. Also, the Company is not required to transfer or
exchange any Note for a period of 15 days before a selection of Notes to be
redeemed or during the period between a record date and the corresponding
Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the Notes then
outstanding, and any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of Notes, the Company and the Trustee may amend or supplement the
Indenture or the Notes to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Notes in addition to or in place of certificated
Notes, to provide for the assumption of the Company's obligations to Holders of
Notes in the case of a merger or consolidation, to make any change that would
provide any additional rights or benefits to the Holders of Notes or that does
not adversely affect the legal rights under the Indenture of any such Holder, or
to comply with requirements of the Commission in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act.
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for
30 days in the payment when due of interest on, or Liquidated Damages, if any,
with respect to, the Notes; (ii) default in payment when due of the principal
of, or premium, if any, on, the Notes; (iii) failure by the Company to comply
with the provisions of Section 4.07, 4.09, 4.10 or 4.15 of the Indenture; (iv)
failure by the Company for 60 days after notice to comply with any of its other
agreements in the Indenture or the Notes; (v) default under any mortgage,
indenture or instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed by the Company or any
of its Subsidiaries (or the payment of which is Guaranteed by the Company or any
of its Subsidiaries)
A-1-5
<PAGE>
whether such Indebtedness or Guarantee now exists, or is created after the date
of the Indenture, which default (A) is caused by a failure to pay principal of
or premium, if any, or interest on such Indebtedness on or prior to the
expiration of the grace period provided in such Indebtedness on the date of such
default (a "Payment Default") or (B) results in the acceleration of such
Indebtedness prior to its express maturity and, in each case, the principal
amount of any such Indebtedness, together with the principal amount of any other
such Indebtedness under which there has been a Payment Default or the maturity
of which has been so accelerated, aggregates $5.0 million or more; (vi) failure
by the Company or any of its Subsidiaries to pay final judgments aggregating in
excess of $5.0 million, which judgments are not paid, discharged or stayed for a
period of 60 days; (vii) except as permitted by the Indenture, any Subsidiary
Guarantee shall be held in any judicial proceeding to be unenforceable or
invalid or shall cease for any reason to be in full force and effect or any
Guarantor, or any Person acting on behalf of any Guarantor, shall deny or
disaffirm its obligations under its Subsidiary Guarantee; and (viii) certain
events of bankruptcy or insolvency with respect to the Company or any of its
Subsidiaries. If any Event of Default occurs and is continuing, the Trustee or
the Holders of at least 25% in principal amount of the then outstanding Notes
may declare all the Notes to be due and payable immediately. Notwithstanding the
foregoing, in the case of an Event of Default arising from certain events of
bankruptcy or insolvency, with respect to the Company, any Significant
Subsidiary or any group of Subsidiaries that, taken together, would constitute a
Significant Subsidiary, all outstanding Notes will become due and payable
without further action or notice. Holders of the Notes may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default or Event of Default and its consequences
under the Indenture except a continuing Default or Event of Default in the
payment of interest on, or the principal of, the Notes. The Company is required
to deliver to the Trustee annually a statement regarding compliance with the
Indenture, and the Company is required upon becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such Default
or Event of Default.
13. TRUSTEE DEALINGS WITH COMPANY. The Indenture contains certain
limitations on the rights of the Trustee, should it become a creditor of the
Company, to obtain payment of claims in certain cases, or to realize on certain
property received in respect of any such claim as security or otherwise. The
Trustee will be permitted to engage in other transactions; however, if it
acquires any conflicting interest it must eliminate such conflict within 90
days, apply to the Commission for permission to continue or resign.
14. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator or stockholder of the Company, as such, shall have any liability
for any obligations of the Company under the Notes, the Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of Notes by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes. Such waiver may not be effective to waive liabilities under the
federal securities laws and it is the view of the Commission that such a waiver
is against public policy.
15. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
A-1-6
<PAGE>
16. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES. In
addition to the rights provided to Holders of Notes under the Indenture, Holders
of Transferred Restricted Securities shall have all the rights set forth in the
Registration Rights Agreement dated as of November 15, 1996, between the Company
and the parties named on the signature pages thereof (the "Registration Rights
Agreement").
18. SUBSIDIARY GUARANTEES. This Note is entitled to the benefits of the
guarantee of each of the Guarantors made for the benefit of the Holders. Upon
the terms and subject to the conditions set forth in the Indenture, the
Subsidiary Guarantors have unconditionally agreed that the principal, interest,
premium, if any, and Liquidated Damages, if any, on the Notes will be duly and
punctually paid in full when due, whether at maturity, by acceleration or
otherwise, and interest on overdue principal, premium, if any, Liquidated
Damages, if any, and (to the extent permitted by law) interest on any interest,
if any, on the Notes and all other payment obligations of the Company to the
Holders or the Trustee under the Notes or the Indenture will be promptly paid in
full.
19. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Dollar Financial Group, Inc.
1436 Lancaster Avenue, Suite 210
Berwyn, Pennsylvania 19312
Attention: Chief Financial Officer
A-1-7
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
- --------------------------------------------------------------------------------
Date:_______________
Your Signature:_________________________________
(Sign exactly as your name appears
on the face of this Note)
Signature Guarantee.
A-1-8
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the box below:
[_] Section 4.10 [_] Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased: $__________
Date:__________________ Your Signature:_____________________________
(Sign exactly as your name
appears on the Note)
Tax Identification No.:____________
Signature Guarantee:*
- -------------------------
* Participant in Recognized Signature Medallion Program (or other
signature guarantor acceptable to Trustee).
A-1-9
<PAGE>
SCHEDULE OF EXCHANGES FOR CERTIFICATED NOTE OR ANOTHER GLOBAL NOTE(2)
The following exchanges of a part of this Global Note for Certificated
Notes or another Global Note have been made:
<TABLE>
<CAPTION>
Principal Amount of this Signature of
Amount of decrease in Amount of increase in Global Note authorized officer of
Principal Amount of Principal Amount of following such decrease Trustee or
Date of Exchange this Global Note this Global Note (or increase) Note Custodian
- ---------------- ---------------- ---------------- ------------- --------------
<S> <C> <C> <C> <C>
</TABLE>
- --------
(2) This should be included only if the Note is issued in global form.
A-1-10
<PAGE>
EXHIBIT A-2
(Face of Regulation S Temporary Global Note)
================================================================================
10 7/8% Senior Notes due 2006
CUSIP U25421AA3
No. ___________ $___________
DOLLAR FINANCIAL GROUP, INC.
promises to pay to
or registered assigns,
the principal sum of
_________________ Dollars ($________) on November 15, 2006.
Interest Payment Dates: May 15 and November 15
Record Dates: May 1 and November 1
Dated: November 15, 1996
DOLLAR FINANCIAL GROUP, INC.
By:________________________________
Name:
Title:
This is one of the
Notes referred to
in the within-mentioned Indenture: (SEAL)
FLEET NATIONAL BANK,
as Trustee
By:_______________________________
================================================================================
A-2-1
<PAGE>
(Back of Regulation S Temporary Global Note)
10 7/8% Senior Note due 2006
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(A) TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, OR IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT, (B) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (C)
OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (D) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY
OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY EVIDENCED
HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
A-2-2
<PAGE>
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND
THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE
AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN.)
NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S
TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON
PRIOR TO THE EXCHANGE OF THIS NOTE FOR A REGULATION S PERMANENT GLOBAL NOTE AS
CONTEMPLATED BY THE INDENTURE.
Subject to the provisions hereof, Dollar Financial Group, Inc., a New
York corporation, (the "Company"), promises to pay to _____________ the
principal sum of _______________ UNITED STATES DOLLARS (U.S. $__________) on
November 15, 2006, and to pay interest on the principal amount of this Note at
the rate of 10 7/8% per annum. Interest shall be paid in cash semi-annually in
arrears on May 15 and November 15, or if any such day is not a Business Day, on
the next succeeding Business Day (each an "Interest Payment Date"); provided
that the first Interest Payment Date shall be May 15, 1997. Interest on the
Notes will accrue from the most recent date to which interest has been paid or,
if no interest has been paid, from the date of original issuance. Interest will
be computed on the basis of a 360-day year comprised of twelve 30-day months.
This Regulation S Temporary Global Note is issued in respect of an
issue of 10 7/8% Senior Notes due 2006 (the "Notes") of the Company, limited to
the aggregate principal amount of U.S. $110,000,000 issued pursuant to an
Indenture (the "Indenture") dated as of November 15, 1996, among the Company,
the Guarantors listed on Exhibit C thereto and Fleet National Bank, as trustee
(the "Trustee"), and is governed by the terms and conditions of the Indenture
governing the Notes, which terms and conditions are incorporated herein by
reference and, except as otherwise provided herein, shall be binding on the
Company and the Holder hereof as if fully set forth herein. Unless the context
otherwise requires, the terms used herein shall have the meanings specified in
the Indenture.
Until this Regulation S Temporary Global Note is exchanged for
Regulation S Permanent Global Notes, the Holder hereof shall not be entitled to
receive payments of interest hereon although interest will continue to accrue;
until so exchanged in full, this Regulation S Temporary Global Note shall in all
other respects be entitled to the same benefits as other Notes under the
Indenture.
This Regulation S Temporary Global Note is exchangeable in whole or in
part for one or more Regulation S Permanent Global Notes or Rule 144A Global
Notes only (i) on or after the termination of the 40-day restricted period (as
defined in Regulation S) and (ii) upon presentation of certificates (accompanied
by an Opinion of Counsel, if applicable) required by Article 2 of the Indenture.
Upon exchange of this Regulation S Temporary Global Note for one or more
Regulation S Permanent Global Notes or Rule 144A Global Notes, the Trustee shall
cancel this Regulation S Temporary Global Note.
This Regulation S Temporary Global Note shall not become valid or
obligatory until the certificate of authentication hereon shall have been duly
manually signed by the Trustee in accordance with the Indenture. This Regulation
S Temporary Global Note shall be governed by and construed in accordance with
the laws of the State of New York. All references to "$," "Dollars," "dollars"
or
A-2-3
<PAGE>
"U.S. $" are to such coin or currency of the United States of America as at the
time shall be legal tender for the payment of public and private debts therein.
A-2-4
<PAGE>
SCHEDULE OF EXCHANGES FOR GLOBAL NOTES
The following exchanges of a part of this Regulation S Temporary Global
Note for other Global Notes have been made:
<TABLE>
<CAPTION>
Principal Amount of this Signature of
Amount of decrease in Amount of increase in Global Note authorized officer of
Principal Amount of Principal Amount of following such decrease Trustee or
Date of Exchange this Global Note this Global Note (or increase) Note Custodian
- ---------------- ---------------- ---------------- ------------- --------------
<S> <C> <C> <C> <C>
</TABLE>
A-2-5
<PAGE>
EXHIBIT B-1
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM RULE 144A GLOBAL NOTE TO REGULATION S GLOBAL NOTE
(Pursuant to Section 2.06(a)(i) of the Indenture)
Fleet National Bank
777 Main Street, CT/MO/0238
Hartford, CT 06115
Attention: Corporate Trust Administration
Re: 10 7/8% Senior Notes due 2006 of Dollar Financial Group, Inc.
Reference is hereby made to the Indenture, dated as of November 15,
1996 (the "Indenture"), among Dollar Financial Group, Inc., as issuer (the
"Company"), the parties listed on Exhibit C thereto as guarantors and Fleet
National Bank, as trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
This letter relates to $______ principal amount of Notes which are
evidenced by one or more Rule 144A Global Notes (CUSIP No. 256666AA6 and held
with the Depositary in the name of _______________ (the "Transferor"). The
Transferor has requested a transfer of such beneficial interest in the Notes to
a Person who will take delivery thereof in the form of an equal principal amount
of Notes evidenced by one or more Regulation S Global Notes (CUSIP
No.U25421AA3), which amount, immediately after such transfer, is to be held with
the Depositary through Euroclear or Cedel Bank or both (Common Code 7138113).
In connection with such request and in respect of such Notes, the
Transferor hereby certifies that such transfer has been effected in compliance
with the transfer restrictions applicable to the Global Notes and Pursuant to
and in accordance with Rule 903 or Rule 904 under the United States Securities
Act of 1933, as amended (the "Securities Act"), and accordingly the Transferor
hereby further certifies that:
(1) The offer of the Notes was not made to a person in the United
States;
(2) either:
(a) at the time the buy order was originated, the
transferee was outside the United States or the
Transferor and any person acting on its behalf
reasonably believed and believes that the transferee
was outside the United States; or
(b) the transaction was executed in, on or through the
facilities of a designated offshore securities market
and neither the Transferor nor any person acting on
its behalf knows that the transaction was prearranged
with a buyer in the United States;
(3) no directed selling efforts have been made in contravention of
the requirements of Rule 904(b) of Regulation S;
B-1-1
<PAGE>
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) upon completion of the transaction, the beneficial interest
being transferred as described above is to be held with the
Depositary through Euroclear or Cedel Bank or both (Common
Code 7138113).
Upon giving effect to this request to exchange a beneficial interest in
a Rule 144A Global Note for a beneficial interest in a Regulation S Global Note,
the resulting beneficial interest shall be subject to the restrictions on
transfer applicable to Regulation S Global Notes pursuant to the Indenture and
the Securities Act and, if such transfer occurs prior to the end of the 40-day
restricted period associated with the initial offering of Notes, the additional
restrictions applicable to transfers of interest in the Regulation S Temporary
Global Note.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Lehman Brothers Inc. and BA
Securities, Inc. (c/o Lehman Brothers Inc., 3 World Financial Center, New York,
New York 10285), the initial purchaser of such Notes being transferred. Terms
used in this certificate and not otherwise defined in the Indenture have the
meanings set forth in Regulation S under the Securities Act.
[Insert Name of Transferor]
By: _________________________
Name:
Title:
Dated:__________, ____
cc: Dollar Financial Group, Inc.
Lehman Brothers Inc.
BA Securities, Inc.
B-1-2
<PAGE>
EXHIBIT B-2
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM REGULATION S GLOBAL NOTE TO RULE 144A GLOBAL NOTE
(Pursuant to Section 2.06(a)(ii) of the Indenture)
Fleet National Bank
777 Main Street, CT/MO/0238
Hartford, CT 06115
Attention: Corporate Trust Administration
Re: 10 7/8% Senior Notes due 2006 of Dollar Financial Group, Inc.
Reference is hereby made to the Indenture, dated as of November 15,
1996 (the "Indenture"), among Dollar Financial Group, Inc., as issuer (the
"Company"), the parties listed on Exhibit C thereto as guarantors and Fleet
National Bank, as trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
This letter relates to $____________________ principal amount of Notes
which are evidenced by one or more Regulation S Global Notes (CUSIP No.
U25421AA3) and held with the Depositary through [Euroclear] [Cedel Bank] (Common
Code 7138113) in the name of (the "Transferor"). The Transferor has requested a
transfer of such beneficial interest in the Notes to a Person who will take
delivery thereof in the form of an equal principal amount of Notes evidenced by
one or more Rule 144A Global Notes (CUSIP No. 256666AA6), to be held with the
Depositary.
In connection with such request and in respect of such Notes, the
Transferor hereby certifies that:
[CHECK ONE]
[_] such transfer is being effected pursuant to and in accordance
with Rule 144A under the United States Securities Act of 1933,
as amended (the "Securities Act"), and, accordingly, the
Transferor hereby further certifies that the Notes are being
transferred to a Person that the Transferor reasonably
believes is purchasing the Notes for its own account, or for
one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the
meaning of Rule 144A in a transaction meeting the requirements
of Rule 144A;
or
[_] such transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act;
or
[_] such transfer is being effected pursuant to an effective
registration statement under the Securities Act;
B-2-1
<PAGE>
or
[_] such transfer is being effected pursuant to an exemption from
the registration requirements of the Securities Act other than
Rule 144A or Rule 144, and the Transferor hereby further
certifies that the Notes are being transferred in compliance
with the transfer restrictions applicable to the Global Notes
and in accordance with the requirements of the exemption
claimed, which certification is supported by an Opinion of
Counsel, provided by the transferor or the transferee (a copy
of which the Transferor has attached to this certification) in
form reasonably acceptable to the Company and to the
Registrar, to the effect that such transfer is in compliance
with the Securities Act;
and such Notes are being transferred in compliance with any applicable blue sky
securities laws of any state of the United States.
Upon giving effect to this request to exchange a beneficial interest in
Regulation S Global Notes for a beneficial interest in Rule 144A Global Notes,
the resulting beneficial interest shall be subject to the restrictions on
transfer applicable to Rule 144A Global Notes pursuant to the Indenture and the
Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Lehman Brothers Inc. and BA
Securities, Inc. (c/o Lehman Brothers Inc., 3 World Financial Center, New York,
New York 10285), the initial purchasers of such Notes being transferred. Terms
used in this certificate and not otherwise defined in the Indenture have the
meanings set forth in Regulation S under the Securities Act.
[Insert Name of Transferor]
By:__________________________
Name:
Title:
Dated: ______________, _______
cc: Dollar Financial Group, Inc.
Lehman Brothers Inc.
BA Securities, Inc.
B-2-2
<PAGE>
EXHIBIT B-3
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
OF CERTIFICATED NOTES
(Pursuant to Section 2.06(b) of the Indenture)
Fleet National Bank
777 Main Street, CT/MO/0238
Hartford, CT 06115
Attention: Corporate Trust Administration
Re: 10 7/8% Senior Notes due 2006 of Dollar Financial Group, Inc.
Reference is hereby made to the Indenture, dated as of November 15,
1996 (the "Indenture"), among Dollar Financial Group, Inc., as issuer (the
"Company"), the parties listed on Exhibit C thereto as guarantors and Fleet
National Bank, as trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
This letter relates to $____________ principal amount of Notes which
are evidenced by one or more Certificated Notes (CUSIP No. 256666AA6) in the
name of _______________ (the "Transferor"). The Transferor has requested an
exchange or transfer of such Certificated Note(s) in the form of an equal
principal amount of Notes evidenced by one or more Certificated Notes (CUSIP No.
256666AA6), to be delivered to the Transferor or, in the case of a transfer of
such Notes, to such Person as the Transferor instructs the Trustee.
In connection with such request and in respect of the Notes surrendered
to the Trustee herewith for exchange (the "Surrendered Notes"), the Holder of
such Surrendered Notes hereby certifies that:
[CHECK ONE]
[_] the Surrendered Notes are being acquired for the Transferor's
own account, without transfer;
or
[_] the Surrendered Notes are being transferred to the Company;
or
[_] the Surrendered Notes are being transferred pursuant to and in
accordance with Rule 144A under the United States Securities
Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the
Surrendered Notes are being transferred to a Person that the
Transferor reasonably believes is purchasing the Surrendered
Notes for its own account, or for one or more accounts with
respect to which such Person exercises sole investment
discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule
144A, in each case in a transaction meeting the requirements
of Rule 144A;
B-3-1
<PAGE>
or
[_] the Surrendered Notes are being transferred in a transaction
permitted by Rule 144 under the Securities Act;
or
[_] the Surrendered Notes are being transferred pursuant to an
effective registration statement under the Securities Act;
or
[_] such transfer is being effected pursuant to an exemption from
the registration requirements of the Securities Act other than
Rule 144A or Rule 144, and the Transferor hereby further
certifies that the Notes are being transferred in compliance
with the transfer restrictions applicable to the Global Notes
and in accordance with the requirements of the exemption
claimed, which certification is supported by an Opinion of
Counsel, provided by the transferor or the transferee (a copy
of which the Transferor has attached to this certification) in
form reasonably acceptable to the Company and to the
Registrar, to the effect that such transfer is in compliance
with the Securities Act;
and the Surrendered Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Lehman Brothers Inc. and BA
Securities, Inc. (c/o Lehman Brothers Inc., 3 World Financial Center, New York,
New York 10285), the initial purchaser of such Notes being transferred. Terms
used in this certificate and not otherwise defined in the Indenture have the
meanings set forth in Regulation S under the Securities Act.
[Insert Name of Transferor]
By: __________________________
Name:
Title:
Dated:_______________,______
cc: Dollar Financial Group, Inc.
Lehman Brothers Inc.
BA Securities, Inc.
B-3-2
<PAGE>
EXHIBIT B-4
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER FROM
RULE 144A GLOBAL NOTE OR REGULATION S PERMANENT
GLOBAL NOTE TO CERTIFICATED NOTE
(Pursuant to Section 2.06(c) of the Indenture)
Fleet National Bank
777 Main Street, CT/MO/0238
Hartford, CT 06115
Attention: Corporate Trust Administration
Re: 10 7/8% Senior Notes due 2006 of Dollar Financial Group, Inc.
Reference is hereby made to the Indenture, dated as of November 15,
1996 (the "Indenture"), among Dollar Financial Group, Inc., as issuer (the
"Company"), the parties listed on Exhibit C thereto as guarantors and Fleet
National Bank, as trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
This letter relates to $_______________ principal amount of Notes which
are evidenced by a beneficial interest in one or more Rule 144A Global Notes or
Regulation S Permanent Global Notes (CUSIP Nos. 256666AA6 and U25421AA3) in the
name of ________________ (the "Transferor"). The Transferor has requested an
exchange or transfer of such beneficial interest in the form of an equal
principal amount of Notes evidenced by one or more Certificated Notes (CUSIP No.
256666AA6), to be delivered to the Transferor or, in the case of a transfer of
such Notes, to such Person as the Transferor instructs the Trustee.
In connection with such request and in respect of the Notes surrendered
to the Trustee herewith for exchange (the "Surrendered Notes"), the Holder of
such Surrendered Notes hereby certifies that:
[CHECK ONE]
[_] the Surrendered Notes are being transferred to the beneficial
owner of such Notes;
or
[_] the Surrendered Notes are being transferred pursuant to and in
accordance with Rule 144A under the United States Securities
Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the
Surrendered Notes are being transferred to a Person that the
Transferor reasonably believes is purchasing the Surrendered
Notes for its own account, or for one or more accounts with
respect to which such Person exercises sole investment
discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule
144A, in each case in a transaction meeting the requirements
of Rule 144A;
or
B-4-1
<PAGE>
[_] the Surrendered Notes are being transferred in a transaction
permitted by Rule 144 under the Securities Act;
or
[_] the Surrendered Notes are being transferred pursuant to an
effective registration statement under the Securities Act;
or
[_] such transfer is being effected pursuant to an exemption from
the registration requirements of the Securities Act other than
Rule 144A or Rule 144, and the Transferor hereby further
certifies that the Notes are being transferred in compliance
with the transfer restrictions applicable to the Global Notes
and in accordance with the requirements of the exemption
claimed, which certification is supported by an Opinion of
Counsel, provided by the transferor or the transferee (a copy
of which the Transferor has attached to this certification) in
form reasonably acceptable to the Company and to the
Registrar, to the effect that such transfer is in compliance
with the Securities Act;
and the Surrendered Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Lehman Brothers Inc. and BA
Securities, Inc. (c/o Lehman Brothers Inc., 3 World Financial Center, New York,
New York 10285), the initial purchasers of such Notes being transferred. Terms
used in this certificate and not otherwise defined in the Indenture have the
meanings set forth in Regulation S under the Securities Act.
[Insert Name of Transferor]
By: __________________________
Name:
Title:
Dated:____________,______
cc: Dollar Financial Group, Inc.
Lehman Brothers Inc.
BA Securities, Inc.
B-4-2
<PAGE>
EXHIBIT C
GUARANTORS
Albuquerque Investments, Inc.
Any Kind Check Cashing Centers, Inc.
Check Mart of Louisiana, Inc.
Check Mart of New Mexico, Inc.
Check Mart of New Jersey, Inc.
Check Mart of Pennsylvania, Inc.
Check Mart of Texas, Inc.
Check Mart of Utah, Inc.
Check Mart of Washington, Inc.
Check Mart of Washington, D.C., Inc.
Check Mart of Wisconsin, Inc.
DFG Warehousing Co., Inc.
Dollar Financial Insurance Corp.
Dollar Insurance Administration Corp.
Financial Exchange Company of Michigan, Inc.
Financial Exchange Company of Ohio, Inc.
Financial Exchange Company of Pennsylvania, Inc.
Financial Exchange Company of Pittsburgh, Inc.
Financial Exchange Company of Virginia, Inc.
L.M.S. Development Corporation
Monetary Management Corp.
Monetary Management Corporation of Pennsylvania
Monetary Management of California, Inc.
Monetary Management of Maryland, Inc.
Monetary Management of New York, Inc.
Pacific Ring Enterprises, Inc.
U.S. Check Exchange Limited Partnership
C-1
<PAGE>
EXHIBIT D
SUBSIDIARY GUARANTEE
Each of the Guarantors hereby, jointly and severally,
unconditionally guarantees to each Holder of a Note authenticated and delivered
by the Trustee and to the Trustee and its successors and assigns, irrespective
of the validity and enforceability of this Indenture, the Notes or the
obligations of the Company hereunder or thereunder, that (a) the principal of
and premium and interest, including Liquidated Damages, if any, on the Notes
shall be promptly paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal of and interest
on premium and interest, including Liquidated Damages, on the Notes, if any, if
lawful, and all other obligations of the Company to the Holders or the Trustee
hereunder or thereunder shall be promptly paid in full or performed, all in
accordance with the terms hereof and thereof and (b) in case of any extension of
time of payment or renewal of any Notes or any of such other obligations, that
same shall be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by acceleration
or otherwise. Failing payment when due of any amount so guaranteed or any
performance so guaranteed for whatever reason, the Guarantors shall be jointly
and severally obligated to pay the same immediately.
THE OBLIGATIONS OF THE GUARANTORS TO THE HOLDERS OF NOTES AND
TO THE TRUSTEE PURSUANT TO THIS SUBSIDIARY GUARANTEE AND THE INDENTURE ARE
EXPRESSLY SET FORTH IN ARTICLE 10 OF THE INDENTURE, AND REFERENCE IS HEREBY MADE
TO SUCH INDENTURE FOR THE PRECISE TERMS OF THIS SUBSIDIARY GUARANTEE. THE TERMS
OF ARTICLE 10 OF THE INDENTURE ARE INCORPORATED HEREIN BY REFERENCE.
This is a continuing Subsidiary Guarantee and shall remain in
full force and effect and shall be binding upon each Guarantor and its
respective successors and assigns to the extent set forth in the Indenture until
full and final payment of all of the Company's Obligations under the Notes and
the Indenture and shall inure to the benefit of the Trustee and the Holders of
Notes and their successors and assigns and, in the event of any transfer or
assignment of rights by any Holder of Notes or the Trustee, the rights and
privileges herein conferred upon that party shall automatically extend to and be
vested in such transferee or assignee, all subject to the terms and conditions
hereof. Notwithstanding the foregoing, any Guarantor that satisfies the
provisions of Section 10.04 of the Indenture shall be released of its
obligations hereunder. This is a Subsidiary Guarantee of payment and not a
guarantee of collection.
For purposes hereof, each Guarantor's liability will be that
amount from time to time equal to the aggregate liability of such Guarantor
hereunder, but shall be limited to the lesser of (i) the aggregate amount of the
obligations of the Company under the Notes and the Indenture and (ii) the
amount, if any, which would not have (A) rendered such Guarantor "insolvent" (as
such term is defined in the federal Bankruptcy Law and in the Debtor and
Creditor Law of the State of New York) or (B) left it with unreasonably small
capital at the time its Subsidiary Guarantee of the Notes was entered into,
after giving effect to the incurrence of existing Indebtedness immediately prior
to such time; provided that, it shall be a presumption in any lawsuit or other
proceeding in which such Guarantor is a party that the amount guaranteed
pursuant to its Subsidiary Guarantee is the amount set forth in clause (i) above
unless any creditor, or representative of creditors of such Guarantor, or debtor
in possession or trustee in bankruptcy of such Guarantor, otherwise proves in
such a lawsuit that the aggregate liability of such Guarantor is limited to the
amount set forth in clause (ii). The Indenture provides that, in making any
determination as to the solvency or sufficiency of capital of a
D-1
<PAGE>
Guarantor in accordance with the previous sentence, the right of such Guarantor
to contribution from other Guarantors and any other rights such Guarantor may
have, contractual or otherwise, shall be taken into account.
The terms of this Subsidiary Guarantee shall be governed by
and construed in accordance with the internal laws of the State of New York.
Capitalized terms used herein have the same meanings given in
the Indenture unless otherwise indicated.
[Guarantor]
By: ______________________________
Name:
Title:
D-2
<PAGE>
EXHIBIT E
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated
as of _______________, between _________________ (the "Guarantor"), a direct or
indirect subsidiary of Dollar Financial Group, Inc. (or its successor), a New
York corporation (the "Company"), and Fleet National Bank, as trustee under the
indenture referred to below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to
the Trustee an indenture (the "Indenture"), dated as of November 15, 1996,
providing for the issuance of an aggregate principal amount of $110,000,000 of
10 7/8% Senior Notes due 2006 (the "Notes").
WHEREAS, Section 4.17 of the Indenture provides that under
certain circumstances the Company is required to cause the Guarantor to execute
and deliver to the Trustee a supplemental indenture pursuant to which the
Guarantor shall unconditionally guarantee all of the Company's obligations under
the Notes pursuant to a Subsidiary Guarantee on the terms and conditions set
forth herein; and
NOW THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the Guarantor and the Trustee mutually covenant and agree for the equal and
ratable benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indentures.
2. AGREEMENT TO GUARANTEE. The Guarantor hereby agrees,
jointly and severally with all other Guarantors, to guarantee the Company's
obligations under the Notes on the terms and subject to the conditions set forth
in Article 10 of the Indenture and to be bound by all other applicable
provisions of the Indenture.
3. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator or stockholder of the Guarantor, as such, shall have any liability
for any obligations of the Company or any Guarantor under the Notes, any
Subsidiary Guarantees, the Indenture or this Supplemental Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of Notes by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes. Such waiver may not be effective to waive liabilities under the
federal securities laws and it is the view of the Commission that such a waiver
is against public policy.
4. EFFECTIVENESS. This Supplemental Indenture shall be
effective upon execution by the parties hereto.
5. RECITALS. The recitals contained herein shall be taken as
the statements of the Company and the Guarantors and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity of this Supplemental Indenture.
E-1
<PAGE>
6. NEW YORK LAW TO GOVERN. THE INTERNAL LAWS OF THE STATE OF
NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE.
7. COUNTERPARTS. The parties may sign any number of copies of
this Supplemental Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
8. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
[Guarantor]
By: ______________________________
Name:
Title:
E-2
Exhibit 4.3
<PAGE>
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A/B EXCHANGE
REGISTRATION RIGHTS AGREEMENT
Dated as of November 15, 1996
by and among
Dollar Financial Group, Inc.
Albuquerque Investments, Inc.
Any Kind Check Cashing Centers, Inc.
Check Mart of Louisiana, Inc.
Check Mart of New Mexico, Inc.
Check Mart of New Jersey, Inc.
Check Mart of Pennsylvania, Inc.
Check Mart of Texas, Inc.
Check Mart of Utah, Inc.
Check Mart of Washington, Inc.
Check Mart of Washington, D.C., Inc.
Check Mart of Wisconsin, Inc.
DFG Warehousing Co., Inc.
Dollar Financial Insurance Corp.
Dollar Insurance Administration Corp.
Financial Exchange Company of Michigan, Inc.
Financial Exchange Company of Ohio, Inc.
Financial Exchange Company of Pennsylvania, Inc.
Financial Exchange Company of Pittsburgh, Inc.
Financial Exchange Company of Virginia, Inc.
L.M.S. Development Corporation
Monetary Management Corp.
Monetary Management Corporation of Pennsylvania
Monetary Management of California, Inc.
Monetary Management of Maryland, Inc.
Monetary Management of New York, Inc.
Pacific Ring Enterprises, Inc.
U.S. Check Exchange Limited Partnership
and
Lehman Brothers Inc.
BA Securities, Inc.
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<PAGE>
This Registration Rights Agreement (this "Agreement") is made and
entered into as of November 15, 1996 by and among Dollar Financial Group, Inc.,
a New York corporation (the "Company"), each of the Company's domestic
subsidiaries listed on Schedule I hereto (the "Guarantors"), and Lehman Brothers
Inc. and BA Securities, Inc. (the "Initial Purchasers"), each of whom has agreed
to purchase the Company's 10 7/8% Senior Notes due 2006 (the "Series A Notes")
pursuant to the Purchase Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated
November 12, 1996 (the "Purchase Agreement"), by and among the Company, the
Guarantors and the Initial Purchasers. In order to induce the Initial Purchasers
to purchase the Series A Notes, the Company has agreed to provide the
registration rights set forth in this Agreement. The execution and delivery of
this Agreement is a condition to the obligations of the Initial Purchasers set
forth in Section 2 of the Purchase Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
Broker-Dealer: Any broker or dealer registered under the Exchange Act.
Closing Date: The date of this Agreement.
Commission: The Securities and Exchange Commission.
Consummate: A Registered Exchange Offer shall be deemed "Consummated"
for purposes of this Agreement upon the occurrence of (i) the filing and
effectiveness under the Securities Act of the Exchange Offer Registration
Statement relating to the Series B Notes to be issued in the Exchange Offer,
(ii) the maintenance of such Registration Statement continuously effective and
the keeping of the Exchange Offer open for a period not less than the minimum
period required pursuant to Section 3(b) hereof, and (iii) the delivery by the
Company to the Registrar under the Indenture of Series B Notes in the same
aggregate principal amount as the aggregate principal amount of Series A Notes
that were tendered by Holders thereof pursuant to the Exchange Offer.
Damages Payment Date: With respect to the Series A Notes, each Interest
Payment Date.
Effectiveness Target Date: As defined in Section 5.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Offer: The registration by the Company under the Securities Act
of the Series B Notes pursuant to a Registration Statement pursuant to which the
Company offers the Holders of all outstanding Transfer Restricted Securities the
opportunity to exchange all such outstanding Transfer Restricted Securities held
by such Holders for Series B Notes in an aggregate principal amount equal to the
aggregate principal amount of the Transfer Restricted Securities tendered in
such exchange offer by such Holders.
Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
<PAGE>
Exempt Resales: The transactions in which the Initial Purchasers propose
to sell the Series A Notes to certain "qualified institutional buyers," as such
term is defined in Rule 144A under the Securities Act, and to certain
institutional "accredited investors," as such term is defined in Rule 501(a)(1),
(2), (3) and (7) of Regulation D under the Securities Act ("Accredited
Institutions").
Holders: As defined in Section 2(b) hereof.
Indemnified Holder: As defined in Section 8(a) hereof.
Indenture: The Indenture, dated as of November 15, 1996, among the
Company, Fleet National Bank, as trustee (the "Trustee"), and the Guarantors,
pursuant to which the Notes are to be issued, as such Indenture is amended or
supplemented from time to time in accordance with the terms thereof.
Initial Purchasers: As defined in the preamble hereto.
Interest Payment Date: As defined in the Indenture and the Notes.
NASD: National Association of Securities Dealers, Inc.
Notes: The Series A Notes and the Series B Notes.
Person: An individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
Prospectus: The prospectus included in a Registration Statement, as
amended or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated by
reference into such Prospectus.
Record Holder: With respect to any Damages Payment Date relating to the
Notes, each Person who is a Holder of Notes on the record date with respect to
the Interest Payment Date on which such Damages Payment Date shall occur.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the Company
relating to (a) an offering of Series B Notes pursuant to an Exchange Offer or
(b) the registration for resale of Transfer Restricted Securities pursuant to
the Shelf Registration Statement, which is filed pursuant to the provisions of
this Agreement, in each case, including the Prospectus included therein, all
amendments and supplements thereto (including post-effective amendments) and all
exhibits and material incorporated by reference therein.
Securities Act: The Securities Act of 1933, as amended.
Series B Notes: The Company's 10 7/8% Senior Notes due 2006,
substantially identical to the Series A Notes, to be issued pursuant to the
Indenture in the Exchange Offer.
Shelf Filing Deadline: As defined in Section 4 hereof.
2
<PAGE>
Shelf Registration Statement: As defined in Section 4 hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb)
as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Note, until the earliest to occur
of (a) the date on which such Note is exchanged in the Exchange Offer and
entitled to be resold to the public by the Holder thereof without complying with
the prospectus delivery requirements of the Securities Act, (b) the date on
which such Note has been effectively registered under the Securities Act and
disposed of in accordance with a Shelf Registration Statement and (c) the date
on which such Note is distributed to the public pursuant to Rule 144 under the
Securities Act or by a Broker-Dealer pursuant to the "Plan of Distribution"
contemplated by the Exchange Offer Registration Statement (including delivery of
the Prospectus contained therein).
Underwritten Registration or Underwritten Offering: A registration in
which securities of the Company are sold to an underwriter for reoffering to the
public.
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities. The securities entitled to the
benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed to be
a holder of Transfer Restricted Securities (each, a "Holder") whenever such
Person owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permissible under applicable
law or Commission policy (after the procedures set forth in Section 6(a) below
have been complied with), the Company and the Guarantors shall (i) cause to be
filed with the Commission as soon as practicable after the Closing Date, but in
no event later than 45 days after the Closing Date, a Registration Statement
under the Securities Act relating to the Series B Notes and the Exchange Offer,
(ii) use their best efforts to cause such Registration Statement to become
effective at the earliest possible time, but in no event later than 120 days
after the Closing Date, (iii) in connection with the foregoing, file (A) all
pre-effective amendments to such Registration Statement as may be necessary in
order to cause such Registration Statement to become effective, (B) if
applicable, a post-effective amendment to such Registration Statement pursuant
to Rule 430A under the Securities Act and (C) cause all necessary filings in
connection with the registration and qualification of the Series B Notes to be
made under the Blue Sky laws of such jurisdictions as are necessary to permit
Consummation of the Exchange Offer, and (iv) upon the effectiveness of such
Registration Statement, commence the Exchange Offer. The Exchange Offer shall be
on the appropriate form permitting registration of the Series B Notes to be
offered in exchange for the Transfer Restricted Securities and to permit resales
of Notes held by Broker-Dealers as contemplated by Section 3(c) below.
(b) The Company and the Guarantors shall cause the Exchange Offer
Registration Statement to be effective continuously and shall keep the Exchange
Offer open for a period of not less than the
3
<PAGE>
minimum period required under applicable federal and state securities laws to
Consummate the Exchange Offer; provided, however, that in no event shall such
period be less than 20 business days. The Company and the Guarantors shall cause
the Exchange Offer to comply with all applicable federal and state securities
laws. No securities other than the Notes shall be included in the Exchange Offer
Registration Statement. The Company and each of the Guarantors shall use their
best efforts to cause the Exchange Offer to be Consummated on the earliest
practicable date after the Exchange Offer Registration Statement has become
effective, but in no event later than 30 business days thereafter.
(c) The Company and the Guarantors shall indicate in a "Plan of
Distribution" section contained in the Prospectus contained in the Exchange
Offer Registration Statement that any Broker-Dealer who holds Series A Notes
that are Transfer Restricted Securities and that were acquired for its own
account as a result of market-making activities or other trading activities
(other than Transfer Restricted Securities acquired directly from the Company or
one of its affiliates), may exchange such Series A Notes pursuant to the
Exchange Offer; however, such Broker-Dealer may be deemed to be an "underwriter"
within the meaning of the Securities Act and must, therefore, deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resales of the Series B Notes received by such Broker-Dealer in the Exchange
Offer, which prospectus delivery requirement may be satisfied by the delivery by
such Broker-Dealer of the Prospectus contained in the Exchange Offer
Registration Statement. Such "Plan of Distribution" section shall also contain
all other information with respect to such resales by Broker-Dealers that the
Commission may require in order to permit such resales pursuant thereto, but
such "Plan of Distribution" shall not name any such Broker-Dealer or disclose
the amount of Notes held by any such Broker-Dealer except to the extent required
by the Commission as a result of a change in policy after the date of this
Agreement.
The Company and the Guarantors shall use their best efforts to keep the
Exchange Offer Registration Statement continuously effective, supplemented and
amended as required by the provisions of Section 6(c) below to the extent
necessary to ensure that it is available for resales of Notes acquired by
Broker-Dealers for their own accounts as a result of market-making activities or
other trading activities, and to ensure that it conforms with the requirements
of this Agreement, the Securities Act and the policies, rules and regulations of
the Commission as announced from time to time, for a period of one year from the
date on which the Exchange Offer Registration Statement is declared effective.
The Company shall provide sufficient copies of the latest version of
such Prospectus to Broker-Dealers promptly upon request at any time during such
one-year period in order to facilitate such resales.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Company is not required to file an
Exchange Offer Registration Statement or to consummate the Exchange Offer
because the Exchange Offer is not permitted by applicable law or Commission
policy (after the procedures set forth in Section 6(a) below have been complied
with) or (ii) if any Holder of Transfer Restricted Securities shall notify the
Company within 20 business days of the Consummation of the Exchange Offer (A)
that such Holder is prohibited by applicable law or Commission policy from
participating in the Exchange Offer, or (B) that such Holder may not resell the
Series B Notes acquired by it in the Exchange Offer to the public without
delivering a prospectus and that the Prospectus contained in the Exchange Offer
Registration Statement is not appropriate or available for such resales by such
Holder, or (C) that such Holder is a Broker-Dealer and
4
<PAGE>
holds Series A Notes acquired directly from the Company or one of its
affiliates, then the Company and the Guarantors shall:
(x) cause to be filed a shelf registration statement pursuant to Rule
415 under the Securities Act, which may be an amendment to the Exchange
Offer Registration Statement (in either event, the "Shelf Registration
Statement") on or prior to the earliest to occur of (1) the 30th day after
the date on which the Company determines that it is not required to file the
Exchange Offer Registration Statement, (2) the 30th day after the date on
which the Company receives notice from a Holder of Transfer Restricted
Securities as contemplated by clause (ii) above, and (3) the 60th day after
the Closing Date (such earliest date being the "Shelf Filing Deadline"),
which Shelf Registration Statement shall provide for resales of all Transfer
Restricted Securities the Holders of which shall have provided the
information required pursuant to Section 4(b) hereof; and
(y) use their best efforts to cause such Shelf Registration Statement
to be declared effective by the Commission on or before the 60th day after
the Shelf Filing Deadline.
The Company and the Guarantors shall use their best efforts to keep such
Shelf Registration Statement continuously effective, supplemented and amended as
required by the provisions of Sections 6(b) and (c) hereof to the extent
necessary to ensure that it is available for resales of Notes by the Holders of
Transfer Restricted Securities entitled to the benefit of this Section 4(a), and
to ensure that it conforms with the requirements of this Agreement, the
Securities Act and the policies, rules and regulations of the Commission as
announced from time to time, for a period of at least three years following the
Closing Date.
(b) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 10 business days after receipt of a request
therefor, such information as the Company may reasonably request for use in
connection with any Shelf Registration Statement or Prospectus or preliminary
Prospectus included therein. No Holder of Transfer Restricted Securities shall
be entitled to Liquidated Damages pursuant to Section 5 hereof unless and until
such Holder shall have used its best efforts to provide all such reasonably
requested information. Each Holder as to which any Shelf Registration Statement
is being effected agrees to furnish promptly to the Company all information
required to be disclosed in order to make the information previously furnished
to the Company by such Holder not materially misleading.
SECTION 5. LIQUIDATED DAMAGES
If (i) any of the Registration Statements required by this Agreement is
not filed with the Commission on or prior to the date specified for such filing
in this Agreement, (ii) any of such Registration Statements has not been
declared effective by the Commission on or prior to the date specified for such
effectiveness in this Agreement (the "Effectiveness Target Date"), (iii) the
Exchange Offer has not been Consummated within 30 business days after the
Effectiveness Target Date with respect to the Exchange Offer Registration
Statement or (iv) any Registration Statement required by this Agreement is filed
and declared effective but shall thereafter cease to be effective or fail to be
usable for its intended purpose without being succeeded within five business
days thereafter by a post-effective
5
<PAGE>
amendment to such Registration Statement that cures such failure and that is
itself immediately declared effective (each such event referred to in clauses
(i) through (iv), a "Registration Default"), the Company and each of the
Guarantors hereby jointly and severally agree to pay liquidated damages to each
Holder of Transfer Restricted Securities with respect to the first 90-day period
immediately following the occurrence of such Registration Default, in an amount
equal to $.10 per week per $1,000 principal amount of Transfer Restricted
Securities held by such Holder for each week or portion thereof that the
Registration Default continues. The amount of the liquidated damages shall
increase by an additional $.05 per week per $1,000 in principal amount of
Transfer Restricted Securities with respect to each subsequent 90-day period
until all Registration Defaults have been cured, up to a maximum amount of
liquidated damages of $.50 per week per $1,000 principal amount of Transfer
Restricted Securities. All accrued liquidated damages shall be paid to Record
Holders by the Company by wire transfer of immediately available funds or by
federal funds check on each Damages Payment Date, as provided in the Indenture.
Following the cure of all Registration Defaults relating to any particular
Transfer Restricted Securities, the accrual of liquidated damages with respect
to such Transfer Restricted Securities will cease.
All obligations of the Company and the Guarantors set forth in the
preceding paragraph that are outstanding with respect to any Transfer Restricted
Security at the time such security ceases to be a Transfer Restricted Security
shall survive until such time as all such obligations with respect to such
Security shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company and each of the Guarantors shall comply with all of
the provisions of Section 6(c) below, shall use its best efforts to effect such
exchange to permit the sale of Transfer Restricted Securities being sold in
accordance with the intended method or methods of distribution thereof, and
shall comply with all of the following provisions:
(i) If in the reasonable opinion of counsel to the Company there is a
question as to whether the Exchange Offer is permitted by applicable law,
the Company and the Guarantors hereby agree to seek a no-action letter or
other favorable decision from the Commission allowing the Company and the
Guarantors to Consummate an Exchange Offer for such Series A Notes. The
Company and the Guarantors each hereby agrees to pursue the issuance of such
a decision to the Commission staff level but shall not be required to take
commercially unreasonable action to effect a change of Commission policy.
The Company and the Guarantors each hereby agrees, however, to (A)
participate in telephonic conferences with the Commission, (B) deliver to
the Commission staff an analysis prepared by counsel to the Company setting
forth the legal bases, if any, upon which such counsel has concluded that
such an Exchange Offer should be permitted and (C) diligently pursue a
resolution (which need not be favorable) by the Commission staff of such
submission.
(ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer Restricted
Securities shall furnish, upon the request of the Company, prior to the
Consummation thereof, a written representation to the Company (which may be
contained in the letter of transmittal contemplated by the Exchange Offer
Registration Statement) to the effect that (A) it is not an affiliate of the
Company, (B) it is not engaged in, and does not
6
<PAGE>
intend to engage in, and has no arrangement or understanding with any person
to participate in, a distribution of the Series B Notes to be issued in the
Exchange Offer and (C) it is acquiring the Series B Notes in its ordinary
course of business. In addition, all such Holders of Transfer Restricted
Securities shall otherwise cooperate in the Company's preparations for the
Exchange Offer. Each Holder hereby acknowledges and agrees that any
Broker-Dealer and any such Holder using the Exchange Offer to participate in
a distribution of the securities to be acquired in the Exchange Offer (1)
could not under Commission policy as in effect on the date of this Agreement
rely on the position of the Commission enunciated in Morgan Stanley and Co.,
Inc. (available June 5, 1991) and Exxon Capital Holdings Corporation
(available May 13, 1988), as interpreted in the Commission's letter to
Shearman & Sterling dated July 2, 1993, and similar no-action letters
(including any no-action letter obtained pursuant to clause (i) above), and
(2) must comply with the registration and prospectus delivery requirements
of the Securities Act in connection with a secondary resale transaction and
that such a secondary resale transaction should be covered by an effective
registration statement containing the selling security holder information
required by Item 507 or 508, as applicable, of Regulation S-K if the resales
are of Series B Notes obtained by such Holder in exchange for Series A Notes
acquired by such Holder directly from the Company.
(iii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Company and the Guarantors shall provide a supplemental
letter to the Commission (A) stating that the Company and the Guarantors are
registering the Exchange Offer in reliance on the position of the Commission
enunciated in Exxon Capital Holdings Corporation (available May 13, 1988),
Morgan Stanley and Co., Inc. (available June 5, 1991) and, if applicable,
any no-action letter obtained pursuant to clause (i) above and (B) including
a representation that neither the Company nor the Guarantors has entered
into any arrangement or understanding with any Person to distribute the
Series B Notes to be received in the Exchange Offer and that, to the best of
the Company's information and belief, each Holder participating in the
Exchange Offer is acquiring the Series B Notes in its ordinary course of
business and has no arrangement or understanding with any Person to
participate in the distribution of the Series B Notes received in the
Exchange Offer.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company and the Guarantors shall comply with all the
provisions of Section 6(c) below and shall use their best efforts to effect such
registration to permit the sale of the Transfer Restricted Securities being sold
in accordance with the intended method or methods of distribution thereof, and
pursuant thereto the Company will as expeditiously as possible prepare and file
with the Commission a Registration Statement relating to the registration on any
appropriate form under the Securities Act, which form shall be available for the
sale of the Transfer Restricted Securities in accordance with the intended
method or methods of distribution thereof.
(c) General Provisions. In connection with any Registration Statement
and any Prospectus required by this Agreement to permit the sale or resale of
Transfer Restricted Securities (including, without limitation, any Registration
Statement and the related Prospectus required to permit resales of Notes by
Broker-Dealers), the Company and the Guarantors shall:
(i) use all commercially reasonable efforts to keep such Registration
Statement continuously effective and provide all requisite financial
statements (including, if required by the Securities Act or any regulation
thereunder, financial statements of each of the Guarantors) for the period
specified in Section 3 or 4 of this Agreement, as applicable; upon the
occurrence of any event that would cause any such Registration Statement or
the Prospectus contained therein (A) to contain
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a material misstatement or omission or (B) not to be effective and usable
for resale of Transfer Restricted Securities during the period required by
this Agreement, the Company shall file promptly an appropriate amendment to
such Registration Statement, in the case of clause (A), correcting any such
misstatement or omission, and, in the case of either clause (A) or (B), use
its best efforts to cause such amendment to be declared effective and such
Registration Statement and the related Prospectus to become usable for their
intended purpose(s) as soon as practicable thereafter;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be necessary
to keep the Registration Statement effective for the applicable period set
forth in Section 3 or 4 hereof, as applicable, or such shorter period as
will terminate when all Transfer Restricted Securities covered by such
Registration Statement have been sold; cause the Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented
to be filed pursuant to Rule 424 under the Securities Act, and to comply
fully with the applicable provisions of Rules 424 and 430A under the
Securities Act in a timely manner; and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by
such Registration Statement during the applicable period in accordance with
the intended method or methods of distribution by the sellers thereof set
forth in such Registration Statement or supplement to the Prospectus;
(iii) advise the underwriter(s), if any, and selling Holders promptly
and, if requested by such Persons, to confirm such advice in writing, (A)
when the Prospectus or any Prospectus supplement or post-effective amendment
has been filed, and, with respect to any Registration Statement or any
post-effective amendment thereto, when the same has become effective, (B) of
any request by the Commission for amendments to the Registration Statement
or amendments or supplements to the Prospectus or for additional information
relating thereto, (C) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement under the
Securities Act or of the suspension by any state securities commission of
the qualification of the Transfer Restricted Securities for offering or sale
in any jurisdiction, or the initiation of any proceeding for any of the
preceding purposes, (D) of the existence of any fact or the happening of any
event that makes any statement of a material fact made in the Registration
Statement, the Prospectus, any amendment or supplement thereto, or any
document incorporated by reference therein untrue, or that requires the
making of any additions to or changes in the Registration Statement or the
Prospectus in order to make the statements therein not misleading. If at any
time the Commission shall issue any stop order suspending the effectiveness
of the Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption from qualification of the Transfer Restricted Securities under
state securities or Blue Sky laws, the Company and the Guarantors shall use
their best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time;
(iv) furnish to each of the selling Holders and each of the
underwriter(s), if any, before filing with the Commission, copies of any
Registration Statement or any Prospectus included therein or any amendments
or supplements to any such Registration Statement or Prospectus (including
all documents incorporated by reference after the initial filing of such
Registration Statement), which documents will be subject to the review of
such Holders and underwriter(s), and the Company will not file any such
Registration Statement or Prospectus or any amendment or supplement to any
such Registration Statement or Prospectus (including all such documents
incorporated by reference) to which a selling Holder of Transfer Restricted
Securities covered by such Registration Statement or the underwriter(s), if
any, shall reasonably object within five business
8
<PAGE>
days after the receipt thereof; provided that such Holder or underwriter, if
any, shall not be deemed to have approved of any material misstatement or
omission contained in such Registration Statement, amendment, Prospectus or
supplement, as applicable, as proposed to be filed;
(v) promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus,
provide copies of such document to the selling Holders and to the
underwriter(s), if any, make the Company's representatives available (and
representatives of the Guarantors) for discussion of such document and other
customary due diligence matters, and include such information in such
document prior to the filing thereof as such selling Holders or
underwriter(s), if any, reasonably may request;
(vi) make available at reasonable times for inspection by the selling
Holders, any underwriter participating in any disposition pursuant to such
Registration Statement, and any attorney or accountant retained by such
selling Holders or any of the underwriter(s), all financial and other
records, pertinent corporate documents and properties of the Company and the
Guarantors and cause the Company's and the Guarantors' officers, directors
and employees to supply all information reasonably requested by any such
Holder, underwriter, attorney or accountant in connection with such
Registration Statement subsequent to the filing thereof and prior to its
effectiveness;
(vii) if requested by any selling Holders or the underwriter(s), if
any, promptly incorporate in any Registration Statement or Prospectus,
pursuant to a supplement or post-effective amendment if necessary, such
information as such selling Holders and underwriter(s), if any, may
reasonably request to have included therein, including, without limitation,
information relating to the "Plan of Distribution" of the Transfer
Restricted Securities, information with respect to the principal amount of
Transfer Restricted Securities being sold to such underwriter(s), the
purchase price being paid therefor and any other terms of the offering of
the Transfer Restricted Securities to be sold in such offering; and make all
required filings of such Prospectus supplement or post-effective amendment
as soon as practicable after the Company is notified of the matters to be
incorporated in such Prospectus supplement or post-effective amendment;
(viii) cause the Transfer Restricted Securities covered by the
Registration Statement to be rated with the appropriate rating agencies, if
so requested by the Holders of a majority in aggregate principal amount of
Notes covered thereby or the underwriter(s), if any;
(ix) furnish to each selling Holder and each of the underwriter(s),
if any, without charge, at least one copy of the Registration Statement, as
first filed with the Commission, and of each amendment thereto, including
all documents incorporated by reference therein and all exhibits (including
exhibits incorporated therein by reference);
(x) deliver to each selling Holder and each of the underwriter(s), if
any, without charge, as many copies of the Prospectus (including each
preliminary prospectus) and any amendment or supplement thereto as such
Persons reasonably may request; the Company and the Guarantors hereby
consent to the use of the Prospectus and any amendment or supplement thereto
by each of the selling Holders and each of the underwriter(s), if any, in
connection with the offering and the sale of the Transfer Restricted
Securities covered by the Prospectus or any amendment or supplement thereto;
9
<PAGE>
(xi) enter into such agreements (including an underwriting
agreement), and make such representations and warranties, and take all such
other actions in connection therewith in order to expedite or facilitate the
disposition of the Transfer Restricted Securities pursuant to any
Registration Statement contemplated by this Agreement, all to such extent as
may be requested by the Initial Purchasers or by any Holder of Transfer
Restricted Securities or underwriter in connection with any sale or resale
pursuant to any Registration Statement contemplated by this Agreement. The
Company and the Guarantors shall also deliver such documents and
certificates as may be reasonably requested by such parties to evidence
compliance with any customary conditions contained in agreements entered
into by the Company pursuant to this clause (xi), if any;
(xii) (1) furnish to the Initial Purchasers, each selling Holder and
each underwriter in such substance and scope as they may request and as are
customarily made by issuers to underwriters in primary underwritten
offerings, upon the date of the effectiveness of the Shelf Registration
Statement:
(a) a certificate, dated the date of effectiveness of the
Shelf Registration Statement, signed by (y) the President or any Vice
President and (z) a principal financial or accounting officer of each
of the Company and the Guarantors, confirming, as of the date
thereof, the matters set forth in paragraphs (c), (e), (f) and (m) of
Section 7 of the Purchase Agreement and such other matters as such
parties may reasonably request;
(b) an opinion, dated the date of effectiveness of the
Shelf Registration Statement of counsel for the Company and the
Guarantors, covering the matters set forth in paragraphs (g), (h) and
(i) of Section 7 of the Purchase Agreement and such other matter as
such parties may reasonably request, and in any event including a
statement to the effect that such counsel has participated in
conferences with officers and other representatives of the Company
and the Guarantors, representatives of the independent public
accountants for the Company and the Guarantors, the Initial
Purchasers' representatives and the Initial Purchasers' counsel in
connection with the preparation of such Registration Statement and
the related Prospectus and have considered the matters required to be
stated therein and the statements contained therein, although such
counsel has not undertaken to investigate or verify independently,
and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in such
Registration Statement and the related Prospectus, on the basis of
the foregoing (relying as to materiality to a large extent upon the
opinions of officers and other representatives of the Company and the
Guarantors) such counsel does not believe that the Registration
Statement, at the time such Registration Statement or any
post-effective amendment thereto became effective, contained an
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus contained
in such Registration Statement as of its date. Without limiting the
foregoing, such counsel may state further that such counsel assumes
no responsibility for, and has not independently verified, the
accuracy, completeness or fairness of the financial statements, notes
and schedules and other financial data included in any Registration
Statement contemplated by this Agreement or the related Prospectus;
and
(c) a customary comfort letter, dated as of the date of
effectiveness of the Shelf Registration Statement from the Company's independent
accountants, in the
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<PAGE>
customary form and covering matters of the type customarily covered
in comfort letters to underwriters in connection with primary
underwritten offerings, and affirming the matters set forth in the
comfort letters delivered pursuant to Section 7(k) of the Purchase
Agreement, without exception;
(2) set forth in full or incorporate by reference in the
underwriting agreement the indemnification provisions and procedures of
Section 8 hereof with respect to all parties to be indemnified pursuant
to said Section; and
(3) deliver such other documents and certificates as may be
reasonably requested by such parties to evidence compliance with clause
(1) above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company
pursuant to this clause (xii), if any.
If at any time the representations and warranties of the Company and the
Guarantors contemplated in clause (1)(a) above cease to be true and correct,
the Company or the Guarantors shall so advise the Initial Purchasers and the
underwriter(s) and each selling Holder promptly and, if requested by such
Persons, shall confirm such advice in writing. Notwithstanding anything to
the contrary in this Agreement, the Company and the Guarantors shall be
required to comply with this Section 6(c)(xii) only in connection with an
Underwritten Offering.
(xiii) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the underwriter(s), if any,
and their respective counsel in connection with the registration and
qualification of the Transfer Restricted Securities under the securities or
Blue Sky laws of such jurisdictions as the selling Holders or underwriter(s)
may request and do any and all other acts or things necessary or advisable
to enable the disposition in such jurisdictions of the Transfer Restricted
Securities covered by the Shelf Registration Statement; provided, however,
that neither the Company nor the Guarantors shall be required to register or
qualify as a foreign corporation where it is not now so qualified or to take
any action that would subject it to the service of process in suits or to
taxation, other than as to matters and transactions relating to the
Registration Statement, in any jurisdiction where it is not now so subject;
(xiv) shall issue, upon the request of any Holder of Series A Notes
covered by the Shelf Registration Statement, Series B Notes, having an
aggregate principal amount equal to the aggregate principal amount of Series
A Notes surrendered to the Company by such Holder in exchange therefor or
being sold by such Holder; such Series B Notes to be registered in the name
of such Holder or in the name of the purchaser(s) of such Notes, as the case
may be; in return, the Series A Notes held by such Holder shall be
surrendered to the Company for cancellation;
(xv) cooperate with the selling Holders and the underwriter(s), if
any, to facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not bearing any
restrictive legends; and enable such Transfer Restricted Securities to be in
such denominations and registered in such names as the Holders or the
underwriter(s), if any, may request at least two business days prior to any
sale of Transfer Restricted Securities made by such underwriter(s);
(xvi) use all commercially reasonable efforts to cause the Transfer
Restricted Securities covered by the Registration Statement to be registered
with or approved by such other governmental
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<PAGE>
agencies or authorities as may be necessary to enable the seller or sellers
thereof or the underwriter(s), if any, to consummate the disposition of such
Transfer Restricted Securities, subject to the proviso contained in clause
(xii) above;
(xvii) if any fact or event contemplated by clause (c)(iii)(D) above
shall exist or have occurred, prepare a supplement or post-effective
amendment to the Registration Statement or related Prospectus or any
document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain an untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein not misleading;
(xviii) provide a CUSIP number for all Transfer Restricted Securities
not later than the effective date of the Registration Statement and provide
the Trustee under the Indenture with printed certificates for the Transfer
Restricted Securities which are in a form eligible for deposit with the
Depository Trust Company;
(xix) cooperate and assist in any filings required to be made with
the NASD and in the performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter") that is
required to be retained in accordance with the rules and regulations of the
NASD, and use its reasonable best efforts to cause such Registration
Statement to become effective and approved by such governmental agencies or
authorities as may be necessary to enable the Holders selling Transfer
Restricted Securities to consummate the disposition of such Transfer
Restricted Securities;
(xx) otherwise use all commercially reasonable efforts to comply with
all applicable rules and regulations of the Commission, and make generally
available to its security holders, as soon as practicable, a consolidated
earnings statement meeting the requirements of Rule 158 (which need not be
audited) for the twelve-month period (A) commencing at the end of any fiscal
quarter in which Transfer Restricted Securities are sold to underwriters in
a firm or best efforts Underwritten Offering or (B) if not sold to
underwriters in such an offering, beginning with the first month of the
Company's first fiscal quarter commencing after the effective date of the
Registration Statement;
(xxi) cause the Indenture to be qualified under the TIA not later
than the effective date of the first Registration Statement required by this
Agreement, and, in connection therewith, cooperate, and cause the Guarantors
to cooperate, with the Trustee and the Holders of Notes to effect such
changes to the Indenture as may be required for such Indenture to be so
qualified in accordance with the terms of the TIA; and execute, and cause
the Guarantors to execute, and use its best efforts to cause the Trustee to
execute, all documents that may be required to effect such changes and all
other forms and documents required to be filed with the Commission to enable
such Indenture to be so qualified in a timely manner;
(xxii) cause all Transfer Restricted Securities covered by the
Registration Statement to be listed on each securities exchange on which
similar securities issued by the Company are then listed if requested by the
Holders of a majority in aggregate principal amount of Series A Notes or the
managing underwriter(s), if any; and
(xxiii) provide promptly to each Holder upon request each document
filed with the Commission pursuant to the requirements of Section 13 and
Section 15 of the Exchange Act.
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<PAGE>
Each Holder agrees by acquisition of a Transfer Restricted Security
that, upon receipt of any notice from the Company of the existence of any fact
of the kind described in Section 6(c)(iii)(D) hereof, such Holder will forthwith
discontinue disposition of Transfer Restricted Securities pursuant to the
applicable Registration Statement until such Holder's receipt of the copies of
the supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof,
or until it is advised in writing (the "Advice") by the Company that the use of
the Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus. If so
directed by the Company, each Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of such notice. In the event
the Company shall give any such notice, the time period regarding the
effectiveness of such Registration Statement set forth in Section 3 or 4 hereof,
as applicable, shall be extended by the number of days during the period from
and including the date of the giving of such notice pursuant to Section
6(c)(iii)(D) hereof to and including the date when each selling Holder covered
by such Registration Statement shall have received the copies of the
supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof or
shall have received the Advice.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's or the Guarantors'
performance of or compliance with this Agreement will be borne by the Company or
the Guarantors, regardless of whether a Registration Statement becomes
effective, including without limitation: (i) all registration and filing fees
and expenses (including filings made by the Initial Purchasers or Holder with
the NASD (and, if applicable, the fees and expenses of any "qualified
independent underwriter" and its counsel that may be required by the rules and
regulations of the NASD)); (ii) all fees and expenses of compliance with federal
securities and state Blue Sky or securities laws; (iii) all expenses of printing
(including printing certificates for the Series B Notes to be issued in the
Exchange Offer and printing of Prospectuses), messenger and delivery services
and telephone; (iv) all fees and disbursements of counsel for the Company, the
Guarantors and, subject to Section 7(b) below, the Holders of Transfer
Restricted Securities; (v) all application and filing fees in connection with
listing the Notes on a national securities exchange or automated quotation
system pursuant to the requirements hereof; and (vi) all fees and disbursements
of independent certified public accountants of the Company and the Guarantors
(including the expenses of any special audit and comfort letters required by or
incident to such performance).
The Company and the Guarantors will, in any event, bear their internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company and the Guarantors.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company will reimburse the
Initial Purchasers and the Holders of Transfer Restricted Securities being
tendered in the Exchange Offer and/or resold pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or
registered pursuant to the Shelf Registration Statement, as applicable, for the
reasonable fees and disbursements of not more than one counsel as may be chosen
by the Holders of a majority in principal amount of the Transfer Restricted
Securities for whose benefit such Registration Statement is being prepared,
provided that the fees and expenses of such counsel shall not exceed $25,000.
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SECTION 8. INDEMNIFICATION
(a) The Company and the Guarantors, jointly and severally, agree to
indemnify and hold harmless (i) each Holder and (ii) each person, if any, who
controls (within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act) any Holder (any of the persons referred to in this clause
(ii) being hereinafter referred to as a "controlling person") and (iii) the
respective officers, directors, partners, employees, representatives and agents
of any Holder or any controlling person (any person referred to in clause (i),
(ii) or (iii) may hereinafter be referred to as an "Indemnified Holder"), to the
fullest extent lawful, from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof, to which that Indemnified
Holder may become subject, under the Securities Act or otherwise, insofar as
such loss, claim, damage, liability or action arises out of, or is based upon,
(x) any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement or Prospectus (or any amendment or
supplement thereto), or (y) the omission or alleged omission in any Registration
Statement or Prospectus (or any amendment or supplement thereto) to state
therein any material fact required to be stated therein or necessary to make the
statements therein not misleading, and shall reimburse such Indemnified Holder
promptly upon demand for any legal or other expenses reasonably incurred by such
Indemnified Holder in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Company and the Guarantors
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission made in
such Registration Statement or Prospectus (or any amendment or supplement
thereto), in reliance upon and in conformity with written information furnished
to any of the Company or the Guarantors by or on behalf of such Indemnified
Holder specifically for inclusion therein. The foregoing indemnity agreement is
in addition to any liability which any of the Company and each of the Guarantors
may otherwise have to any Indemnified Holder.
(b) Each Holder of Transfer Restricted Securities, severally and not
jointly, shall indemnify and hold harmless each of the Company and the
Guarantors, each of their respective officers and employees, each of their
respective directors, and each person, if any, who controls the Company or any
of the Guarantors within the meaning of the Act, from and against any loss,
claim, damage or liability, joint or several, or any action in respect thereof,
to which the Company or any of the Guarantors or any such director, officer or
controlling person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or Prospectus (or any amendment or
supplement thereto) or the omission or alleged omission to state in the
Registration Statement or Prospectus (or any amendment or supplement thereto)
any material fact required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to the extent that the
untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished to
the Company or any of the Guarantors by or on behalf of the Holder of Transfer
Restricted Securities specifically for inclusion therein, and shall reimburse
the Company, the Guarantors and any such director, officer or controlling person
for any legal or other expenses reasonably incurred by the Company, any of the
Guarantors or any such director, officer or controlling person in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which the Holders of
Transfer Restricted Securities may otherwise have to the Company, any of the
Guarantors, or any such director, officer or controlling person.
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(c) Promptly after receipt by an indemnified party under this Section 8
of notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section 8, notify the indemnifying party in writing of the
claim or the commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have under this Section 8 except to the extent it has been materially
prejudiced by such failure and, provided further, that the failure to notify the
indemnifying party pursuant to this Section 8 shall not relieve it from any
liability which it may have to an indemnified party otherwise than under this
Section 8. If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of investigation; provided,
however, that the Indemnified Holders shall have the right to employ separate
counsel to represent jointly all of the Indemnified Holders who may be subject
to liability arising out of any claim in respect of which indemnity may be
sought by the Indemnified Holders against the Company and each of the Guarantors
under this Section 8 if, in the reasonable judgment of the Indemnified Holders,
it is advisable for the Indemnified Holders to be jointly represented by
separate counsel, and in that event the fees and expenses of not more than one
such separate counsel (in addition to local counsel) shall be paid by the
Company and the Guarantors. No indemnifying party shall (i) without the prior
written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the consent of
the indemnifying party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for any
reason be unavailable to or insufficient to hold harmless an indemnified party
under Section 8(a) or 8(b) in respect of any loss, claim, damage or liability,
or any action in respect thereof, referred to therein, then each indemnifying
party shall, in lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability, or action in respect thereof, (i) in such proportion
as shall be appropriate to reflect the relative benefits received by the Company
and each of the Guarantors, on the one hand, and the Holders from their sale of
Transfer Restricted Securities, on the other, or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and each of the Guarantors, on
the one hand, and the Holders, on the other, with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations. The
relative fault shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company and each of the
Guarantors or the Holders, the intent of the parties and their relative
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knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and each of the Guarantors and each Holder of
Transfer Restricted Securities agree that it would not be just and equitable if
contributions pursuant to this Section 8(d) were to be determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section 8(d) shall be
deemed to include, for purposes of this Section 8(d), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(d), none of the Holders (and its related
Indemnified Holders) shall be required to contribute any amount in excess of the
amount by which the dollar amount of proceeds received by such Holder upon sale
of Transfer Restricted Securities, if any, exceeds the sum of (A) the amount
paid by such Holder for such Transfer Restricted Securities and (B) the amount
of any damages which such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11 of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Holders' obligations to contribute as provided in this
Section 8(d) are several in proportion to their respective principal amount of
Series A Notes held by each of the Holders hereunder and not joint.
SECTION 9. RULE 144A
The Company hereby agrees with each Holder, for so long as any Transfer
Restricted Securities remain outstanding, to make available to any Holder or
beneficial owner of Transfer Restricted Securities in connection with any sale
thereof and any prospective purchaser of such Transfer Restricted Securities
from such Holder or beneficial owner, the information required by Rule
144A(d)(4) under the Securities Act in order to permit resales of such Transfer
Restricted Securities pursuant to Rule 144A.
SECTION 10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in any underwriting arrangements approved by
the Persons entitled hereunder to approve such arrangements and (b) completes
and executes all reasonable questionnaires, powers of attorney, indemnities,
underwriting agreements, lock-up letters and other documents required under the
terms of such underwriting arrangements.
SECTION 11. SELECTION OF UNDERWRITERS
The Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering. In any such Underwritten Offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Company; provided that such
investment bankers and managers must be reasonably satisfactory to the Holders
of a majority in aggregate principal amount of the Transfer Restricted
Securities included in such offering.
16
<PAGE>
SECTION 12. MISCELLANEOUS
(a) Remedies. The Company and the Guarantors agree that monetary damages
(including the liquidated damages contemplated hereby) would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Agreement and hereby agree to waive the defense in any action for
specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company will not, and will cause the
Guarantors not to, on or after the date of this Agreement enter into any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof. None of the Company nor the Guarantors has previously entered
into any agreement granting any registration rights with respect to its
securities to any Person. The rights granted to the Holders hereunder do not in
any way conflict with and are not inconsistent with the rights granted to the
holders of the Company's securities under any agreement in effect on the date
hereof.
(c) Adjustments Affecting the Notes. The Company will not take any
action, or permit any change to occur, with respect to the Notes that would
materially and adversely affect the ability of the Holders to Consummate any
Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless the Company has obtained the
written consent of Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities. Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof that relates exclusively to the
rights of Holders whose securities are being tendered pursuant to the Exchange
Offer and that does not affect directly or indirectly the rights of other
Holders whose securities are not being tendered pursuant to such Exchange Offer
may be given by the Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities being tendered or registered.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of the
Registrar under the Indenture, with a copy to the Registrar under the Indenture;
and
(ii) if to the Company:
Dollar Financial Group, Inc.
1436 Lancaster Ave., Suite 210
Berwyn, PA 19312
Telecopier No.: (610) 296-7844
Attention: Chief Financial Officer
17
<PAGE>
With a copy to:
Weil, Gotshal & Manges
767 5th Avenue
New York, NY 10153
Telecopier No.: (212) 310-8007
Attention: Stephen M. Besen
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if telecopied; and on the
next business day, if timely delivered to an air courier guaranteeing overnight
delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties,
including, without limitation, and without the need for an express assignment,
subsequent Holders of Transfer Restricted Securities; provided, however, that
this Agreement shall not inure to the benefit of or be binding upon a successor
or assign of a Holder unless and to the extent such successor or assign acquired
Transfer Restricted Securities from such Holder.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
THE CONFLICT OF LAW RULES THEREOF.
(j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement together with the other Operative
Documents (as defined in the Purchase Agreement) is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Company with respect to
the Transfer Restricted Securities. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
[SIGNATURE PAGES FOLLOW]
18
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
DOLLAR FINANCIAL GROUP, INC.
By: /s/ Donald Gayhardt
-------------------------------
Donald Gayhardt
Executive Vice President
ALBUQUERQUE INVESTMENTS, INC.
By: /s/ Donald Gayhardt
-------------------------------
Donald Gayhardt
Executive Vice President
ANY KIND CHECK CASHING CENTERS, INC.
By: /s/ Donald Gayhardt
-------------------------------
Donald Gayhardt
Executive Vice President
CHECK MART OF LOUISIANA, INC.
By: /s/ Donald Gayhardt
-------------------------------
Donald Gayhardt
Executive Vice President
CHECK MART OF NEW MEXICO, INC.
By: /s/ Donald Gayhardt
-------------------------------
Donald Gayhardt
Executive Vice President
<PAGE>
CHECK MART OF NEW JERSEY, INC.
By: /s/ Donald Gayhardt
-------------------------------
Donald Gayhardt
Executive Vice President
CHECK MART OF PENNSYLVANIA, INC.
By: /s/ Donald Gayhardt
-------------------------------
Donald Gayhardt
Executive Vice President
CHECK MART OF TEXAS, INC.
By: /s/ Donald Gayhardt
-------------------------------
Donald Gayhardt
Executive Vice President
CHECK MART OF UTAH, INC.
By: /s/ Donald Gayhardt
-------------------------------
Donald Gayhardt
Secretary
CHECK MART OF WASHINGTON, INC.
By: /s/ Donald Gayhardt
-------------------------------
Donald Gayhardt
Secretary
<PAGE>
CHECK MART OF WASHINGTON, D.C., INC.
By: /s/ Donald Gayhardt
-------------------------------
Donald Gayhardt
Executive Vice President
CHECK MART OF WISCONSIN, INC.
By: /s/ Donald Gayhardt
-------------------------------
Donald Gayhardt
Executive Vice President
DFG WAREHOUSING CO., INC.
By: /s/ Donald Gayhardt
-------------------------------
Donald Gayhardt
Executive Vice President
DOLLAR FINANCIAL INSURANCE CORP.
By: /s/ Donald Gayhardt
-------------------------------
Donald Gayhardt
Executive Vice President
DOLLAR INSURANCE ADMINISTRATION CORP.
By: /s/ Donald Gayhardt
-------------------------------
Donald Gayhardt
Executive Vice President
<PAGE>
FINANCIAL EXCHANGE COMPANY OF MICHIGAN, INC.
By: /s/ Donald Gayhardt
-------------------------------
Donald Gayhardt
Executive Vice President
FINANCIAL EXCHANGE COMPANY OF OHIO, INC.
By: /s/ Donald Gayhardt
-------------------------------
Donald Gayhardt
Executive Vice President
FINANCIAL EXCHANGE COMPANY OF PENNSYLVANIA,
INC.
By: /s/ Donald Gayhardt
-------------------------------
Donald Gayhardt
Executive Vice President
FINANCIAL EXCHANGE COMPANY OF PITTSBURGH,
INC.
By: /s/ Donald Gayhardt
-------------------------------
Donald Gayhardt
Executive Vice President
FINANCIAL EXCHANGE COMPANY OF VIRGINIA, INC.
By: /s/ Donald Gayhardt
-------------------------------
Donald Gayhardt
Executive Vice President
<PAGE>
L.M.S. DEVELOPMENT CORPORATION
By: /s/ Donald Gayhardt
-------------------------------
Donald Gayhardt
Executive Vice President
MONETARY MANAGEMENT CORP.
By: /s/ Donald Gayhardt
-------------------------------
Donald Gayhardt
Secretary
MONETARY MANAGEMENT CORPORATION OF
PENNSYLVANIA
By: /s/ Donald Gayhardt
-------------------------------
Donald Gayhardt
Executive Vice President
MONETARY MANAGEMENT OF CALIFORNIA, INC.
By: /s/ Donald Gayhardt
-------------------------------
Donald Gayhardt
Executive Vice President
MONETARY MANAGEMENT OF MARYLAND, INC.
By: /s/ Donald Gayhardt
-------------------------------
Donald Gayhardt
Executive Vice President
<PAGE>
MONETARY MANAGEMENT OF NEW YORK, INC.
By: /s/ Donald Gayhardt
-------------------------------
Donald Gayhardt
Executive Vice President
PACIFIC RING ENTERPRISES, INC.
By: /s/ Donald Gayhardt
-------------------------------
Donald Gayhardt
Executive Vice President
U.S. CHECK EXCHANGE LIMITED PARTNERSHIP
By: ANY KIND CHECK CASHING CENTERS, INC.,
as general partner
By: /s/ Donald Gayhardt
-------------------------------
Donald Gayhardt
Executive Vice President
<PAGE>
LEHMAN BROTHERS INC.
BA SECURITIES, INC.
By: LEHMAN BROTHERS INC.
By: /s/ Theodore J. Davies
--------------------------
Theodore J. Davies
Associate
<PAGE>
SCHEDULE I
Subsidiaries
Albuquerque Investments, Inc.
Any Kind Check Cashing Centers, Inc.
Check Mart of Louisiana, Inc.
Check Mart of New Mexico, Inc.
Check Mart of New Jersey, Inc.
Check Mart of Pennsylvania, Inc.
Check Mart of Texas, Inc.
Check Mart of Utah, Inc.
Check Mart of Washington, Inc.
Check Mart of Washington, D.C., Inc.
Check Mart of Wisconsin, Inc.
DFG Warehousing Co., Inc.
Dollar Financial Insurance Corp.
Dollar Insurance Administration Corp.
Financial Exchange Company of Michigan, Inc.
Financial Exchange Company of Ohio, Inc.
Financial Exchange Company of Pennsylvania, Inc.
Financial Exchange Company of Pittsburgh, Inc.
Financial Exchange Company of Virginia, Inc.
L.M.S. Development Corporation
Monetary Management Corp.
Monetary Management Corporation of Pennsylvania
Monetary Management of California, Inc.
Monetary Management of Maryland, Inc.
Monetary Management of New York, Inc.
Pacific Ring Enterprises, Inc.
U.S. Check Exchange Limited Partnership
Exhibit 10.1(a)
<PAGE>
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
MONETARY MANAGEMENT CORP.
("PURCHASER")
AND
HAPPY'S CHECK CASHING, A SOLE PROPRIETORSHIP
(THE "COMPANY")
AND
CHASE MONEY LOAN, INC.
("CML")
AND
ADRIAN RUBIN
("RUBIN")
DATED
JANUARY 9, 1995
<PAGE>
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is made as of this 9th day of January,
1995 by and among MONETARY MANAGEMENT CORP., a Pennsylvania corporation
("Purchaser"), HAPPY'S CHECK CASHING, an unincorporated Pennsylvania sole
proprietorship (the "Company"), CHASE MONEY LOAN, INC. ("CML"), and ADRIAN RUBIN
("Rubin").
W I T N E S S E T H :
WHEREAS, Rubin is the beneficial and record owner and operator of
the Company and the beneficial and record owner of all of the issued and
outstanding capital stock of CML.
WHEREAS, the Company presently owns and operates 28 check cashing
stores located in Pennsylvania, as listed on Exhibit A attached hereto (the
"Principal Stores"), and desires to sell to Purchaser the Assets (as defined
below) of the Principal Stores, except for the Assets of those Principal Stores
numbered 10 and 26 on Exhibit A (the Principal Stores to be sold hereunder are
hereinafter referred to as the "Stores");
WHEREAS, CML owns and operates a pawn brokering business in certain
of the Stores and desires to sell to Purchaser the Assets of such pawn brokering
business;
WHEREAS, Purchaser desires to acquire and the Company, CML and Rubin
desire to sell the Assets to the Purchaser;
WHEREAS, Purchaser desires that, following the Closing Date, Rubin,
the Company, Alison Rubin and CML, except for operation of the Principal Stores
numbered 10 and 26 on Schedule A, will not compete with Purchaser and its
affiliates under certain terms and in exchange for certain consideration as set
forth in separate Non-Competition Agreements to be entered into on the Closing
Date between the Purchaser and each of such persons (the "Non-Competition
Agreements") as set forth on Exhibit C hereto.
NOW, THEREFORE, in consideration of the covenants, warranties and
mutual agreements set forth herein and in reliance upon the representations and
warranties contained herein, the parties, intending to be legally bound, do
hereby agree as follows:
<PAGE>
SECTION 1. PURCHASE AND SALE OF ASSETS; ASSUMPTION OF CERTAIN
LIABILITIES.
1.1 PURCHASE OF ASSETS. The Purchase Price for the Assets covered by
this Agreement has been determined through arm's length negotiations between the
parties. Subject to and in reliance upon the representations, warranties and
agreements herein set forth, and subject to the terms and conditions herein
contained, the Company, CML and Rubin (collectively sometimes hereafter, the
"Sellers") agree, on the Closing Date, to convey, sell, assign, transfer and
deliver the Assets to the Purchaser, and to perform all of its and their
obligations pursuant to this Agreement, and the Purchaser agrees to perform all
of its obligations pursuant to this Agreement and to purchase and accept, the
Assets. The Sellers have provided Purchaser with access to all of the original
entry books and records in connection with the Stores. In addition, the Sellers
agree to provide Purchaser with access to all documents and/or information as
may be reasonably necessary to enable Purchaser to see to the efficient and
proper conduct and administration of the Assets from and after the Closing Date,
including, without limitation, all historical files, tax returns, records and
personnel data in connection with the Stores. Provided, however that the Sellers
will retain their original financial books and records and other financial
documents now in their possession required for preparation of tax returns but
will provide copies of such books and records to Purchaser at Purchaser's
request.
1.2 ASSETS. It is understood that, on the Closing Date at the time
of Closing (as hereinafter defined) of the transactions contemplated hereby, all
of the properties, business, good will and assets at present used or useable in
the operation of the Stores, except for the Excluded Assets (as defined below)
(collectively the "Assets"), including, but not limited to, the following, shall
be owned by the Sellers, free and clear of all liens, charges, judgments,
encumbrances, taxes, imports or levies, except for the Permitted Encumbrances
(as hereinafter defined) and shall be transferred to the Purchaser:
(a) Licenses and Authorizations. To the extent legally
transferable, and to the extent requested by the Purchaser, the licenses,
permits and authorizations used or useable in the operation of the Stores,
including, specifically, the licenses, permits and authorizations listed on
Schedule 1.2(a) hereto, together with any renewals, extensions or modifications
thereof and additions thereto and other pending applications or applications to
be filed with any regulatory or governmental body made in the ordinary course of
business between the date of this Agreement and the Closing Date (the
"Licenses").
(b) Personal Property, etc. The tangible and intangible
personal property, equipment, machinery, furniture, fixtures, tools, supplies
and other assets, wherever located, used or useable in the operation of the
Stores including, specifically, but not limited to, the property listed on
Schedule 1.2(b) hereto, together with such additions, modifications and
replacements thereto, and subject to deletions therefrom in
-2-
<PAGE>
connection with any such replacements, as may be made in the ordinary course of
business between the date of this Agreement and the Closing Date (the "Personal
Property"). The mobile check cashing vehicle shall be excluded from the Assets,
but the use of such vehicle shall be limited to Jules Shore at 1) Budd Company,
2) 31st St. SEPTA, 3) Proccaici Bros., 4) Wells Fargo at 3rd and Callowhill and
5) Pincus at 2nd and Race.
(c) Real Property. The interest of the Sellers in and to the
leased real property, buildings and structures, leasehold improvements, fixtures
and appurtenances used or useable in the operation of the Stores, described in
Schedule 1.2(c) hereto (the "Real Property") and, to the extent requested by the
Purchaser, the Sellers' interests and rights arising under all legal and valid
agreements, rights and appurtenances relating thereto, including, specifically,
the lease agreements listed on Schedule 1.2(c) hereto (the "Leases"), any
renewals, extensions, amendments or modifications thereof, and any additional
agreements and leases made or entered into in the ordinary course of business
between the date of this Agreement and the Closing Date.
(d) Leases and Agreements. The rights of the Company arising
under the "Assumed Contracts", as defined in Section 5.11(a) hereof, including
specifically, the Leases and other agreements specifically listed on Schedule
5.11 hereto, including any renewals, extensions, amendments or modifications
thereof, and any additional third party agreements, leases, commitments and
orders made or entered into in the ordinary course of business between the date
of this Agreement and the Closing Date.
(e) Intellectual Property, etc. All copyrights, trademarks,
service marks, trade secret rights, computer programs and software, permits,
licenses or other similar rights used or useable in the operation of the Stores,
including, specifically, the copyrights, trademarks, service marks, trade secret
rights, computer programs and software, permits, licenses or other similar
rights listed on Schedule 1.2(e) hereto, together with any additions or
modifications thereto and subject to any deletions therefrom made in the
ordinary course of business between the date of this Agreement and the Closing
Date (the "Intellectual Property").
(f) Except as provided above, all books, records and files
pertaining to the business conducted by the Stores for all periods ending on or
before the Closing Date (the "Books and Records"), subject to the limitations
set forth in 1.1 above and 5.7 below.
(g) Prepaid expenses of the Company existing as of the
Closing Date (the "Prepaid Expenses").
(h) Customer lists, vendor lists and other similar intangible
assets of the Sellers relating to the Stores (the "Intangible Assets").
(i) All of CML's pawn pledges and the Sellers' interest and
possession of collateral delivered in connection thereto.
-3-
<PAGE>
1.3 CASH. It is understood that, any cash, savings accounts,
accounts receivable, refunds of unearned insurance premiums, bank deposits and
items in the process of collection held by the Sellers shall not constitute part
of the Assets and shall be retained by Sellers (the "Excluded Assets"). Solely
as an accommodation to the Sellers, Purchaser will attempt to collect the
Company's outstanding accounts receivable and other items in the process of
collection and will remit to the Company any amounts so collected; and the
Sellers shall pay to Purchaser an amount equal to 10% of all amounts collected
against accounts receivable and items in the process of collection that are 30
days or older as of the Closing Date. Purchaser shall have no affirmative duty
to collect any of such items.
1.4 LIENS. The Sellers agree that, as of Closing, the Assets will be
free and clear of all liens, charges, encumbrances, taxes, imports or levies
except for the Permitted Encumbrances and specifically agree that all liens,
charges, encumbrances or taxes, other than the Permitted Encumbrances, shall be
satisfied upon consummation of the Closing.
1.5 ASSUMED CONTRACTS. Upon Closing, the Sellers will assign,
transfer and convey and deliver, and Purchaser will assume and agree to perform
and discharge, the obligations of the Sellers under the Assumed Contracts.
SECTION 2. LIABILITIES.
2.1 LIABILITIES TO BE ASSUMED. As of the Closing Date, at the time
of Closing, the Sellers shall have satisfied all of its and their obligations
and liabilities other than (i) liabilities or obligations (absolute, contingent
or otherwise) arising after the Closing Date in respect of the Assumed Contracts
(the "Contract Liabilities"); (ii) other liabilities to the extent Purchaser
shall have received a credit therefor pursuant to the apportionment provisions
of Section 2.3 hereof) ("Credited Liabilities"); and (iii) liabilities or
obligations to Rubin or his affiliated entities. The Contract Liabilities and
the Credited Liabilities shall be assumed by Purchaser at Closing. The
liabilities referred to in (i) through (iii) above shall be sometimes
hereinafter referred to as the "Permitted Liabilities".
2.2 OTHER LIABILITIES. Without limiting the generality of Section
2.1 hereof, and regardless of whether any of the following may be disclosed to
Purchaser pursuant to Section 5 hereof or otherwise, or whether Purchaser may
have knowledge of the same: (a) Purchaser shall not assume, and shall not be
deemed to have assumed, any other obligation or liability of the Sellers other
than the Contract Liabilities and the Credited Liabilities; (b) The Sellers will
be jointly and severally liable for and will pay and indemnify Purchaser in
respect of any taxes or other governmental charges or assessments of whatever
kind or nature imposed upon the Purchaser, the Assets, the Stores or the Sellers
(including without limitation any income, franchise or any other similar taxes
based on or measured by income or otherwise, any sales or use taxes, or any
property, excise or other taxes together with any interest or penalties
-4-
<PAGE>
relating thereto) arising out of the operation of the Stores or otherwise or the
ownership of the Assets for periods or events prior to the Closing Date; and (c)
The Sellers shall retain responsibility for and shall pay, perform, satisfy or
obtain a discharge or release from, as of Closing, any obligation, payment,
liability or expense imposed on the Sellers or the Purchaser other than the
Contract Liabilities and the Credited Liabilities.
2.3 APPORTIONMENTS. Rents, additional rent, real estate taxes and
security deposits, personal property taxes, water, utilities, wages and other
employee benefits (including accrued vacation) and other expenses arising from
or by virtue of the Sellers' obligations under the Assumed Contracts (the
"Expenses") paid by, or on behalf of, the Sellers prior to the Closing Date and
allocable, in whole or in part, to any period following the Closing Date, shall
be credited to the Sellers to the extent so allocable, or if unpaid by, or on
behalf of, the Sellers prior to the Closing Date and allocable, in whole or in
part, to any period prior to the Closing Date, shall be credited to Purchaser.
The parties hereto shall as of the Closing Date make apportionments
and shall calculate the Pawn Purchase Price and the Inventory Purchase Price (as
defined below). Any GGP bonus, which may include volume bonuses and super
bonuses payable under the Company's agreement with Western Union shall be split
evenly between Purchaser and the Company promptly after receipt from Western
Union.
SECTION 3 CONSIDERATION FOR TRANSFER OF ASSETS AND NON-COMPETITION
AGREEMENTS.
(a) Purchaser shall acquire the Assets, for an aggregate base
purchase price (the "Purchase Price") of Two Million Seven Hundred Thousand
($2,700,000) Dollars, as adjusted pursuant to Sections 2.1 and 2.3 above. The
Purchase Price shall be paid by delivery of a subordinated judgment note (the
"Judgment Note") to be delivered at Closing, in substantially the form attached
hereto as Exhibit A, subject to such revisions as shall be required or requested
by Purchaser's principal bank(s) and reasonably acceptable to Sellers' counsel
and a standard confession of judgment provision, including reference to
reasonable costs of enforcement. The Judgment Note shall have a four (4) year
term with interest to accrue at a floating rate equal to the prime rate as
announced from time to time by Chemical Manufacturers Hanover Bank, plus one
(1%) percent per annum, but in no event shall the applicable rate of interest be
less than 8-1/2% nor more than 10-1/2%. The Purchase Price for the Assets shall
be allocated by the parties for tax purposes as set forth on Schedule 3.1
hereto. Sellers shall not be subordinated to any future seller financing.
In addition to the Purchase Price, Purchaser shall pay to Sellers,
at Closing an amount equal to one hundred twenty five (125%) percent of the face
value of the advances/loans (which amount includes a twenty five (25%) percent
premium) made by CML in connection with the current pawn pledges delivered by
CML to Purchaser as part of the Assets (the "Pawn Pledge Advances") outstanding
as of the Closing Date (the "Pawn Purchase Price"). The
-5-
<PAGE>
instruments/pawn tickets evidencing such advances shall be transferred to
Purchaser as part of the Assets; and all collateral delivered to CML in
connection with all of its Pawn Pledge Advances shall be transferred to
Purchaser in connection with the transfer of the instruments/pawn tickets
evidencing the advances. To the extent that the pawn tickets, transferred to
Purchaser are unredeemed at a rate which is less than the historical rate
experienced by CML, and as disclosed to Purchaser, Purchase shall have the right
to setoff against amounts due under the Judgment Note, up to the twenty five
(25%) percent premium paid.
In addition to the Purchase Price and the Pawn Purchase Price,
Purchaser shall pay to Sellers at Closing an amount equal to the Agreed Value
(as hereinafter defined) of CML's Inventory (as hereinafter defined) (the
"Inventory Purchase Price").
For purposes hereof:
"Agreed Value" shall mean an amount calculated as:
(a) $11.00 per penny weight of gold jewelry
Inventory, plus
(b) 50% of the stated retail selling value of
the electronic and watch Inventory, plus
(c) the cost to Sellers of all other Inventory;
except diamonds.
No other value shall be included in the Agreed Value of the
Inventory for purposes of calculating the Inventory Purchase Price. No item held
by CML as collateral for Pawn Pledge Advance shall be considered Inventory.
"Inventory" shall mean all items in saleable form as of
Closing which CML owns and holds out for sale to the public in the Stores, all
of which shall be part of the Assets transferred to Purchaser hereunder.
(b) Purchaser and the Sellers represent, warrant and agree that the
allocation set forth in Schedule 3.1 hereto were determined through arms' length
negotiation between the parties hereto.
SECTION 4. CLOSING. Provided that the conditions to the obligations
of the Sellers and Purchaser contained in Sections 8 and 9 hereof have been
satisfied (or waived by the parties entitled to enforce such conditions), a dry
closing of the consummation of the purchase and sale of the Assets contemplated
by this Agreement shall take place at 10:00 a.m. on Saturday February 18, 1995.
The Sellers shall cease conducting business at the Stores as of the close of
business on Friday, February 17, 1995. The parties shall complete the
apportionments as required by Section 2.3 on February 18 and 19. The Funded
Closing (the "Closing") shall, unless another date or place is agreed to by the
Sellers and Purchaser, take place at 10:00 a.m.
-6-
<PAGE>
at the offices of Klehr, Harrison, Harvey, Branzburg & Ellers on Monday,
February 20, 1995 (the "Closing Date"). The Closing shall be deemed to take
place as of the close of business on Friday, February 17, 1995.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE SELLERS. The
Sellers hereby represent, warrant and covenant to Purchaser as follows:
5.1 ORGANIZATION AND GOOD STANDING; ACTIVITIES; CAPITAL STOCK.
(a) The Company is an unincorporated sole proprietorship owned
solely and completely by Rubin and doing business under the name Happy's Check
Cashing and no other name; and CML is a corporation duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Pennsylvania. The Company is, and has been since its date of inception, engaged
solely in the business of owning and operating check cashing outlets and
conducts business in no jurisdiction other than Pennsylvania. CML is, and has
been since its date of inception, engaged solely in the business of owning and
operating a pawn brokering business and conducts business in no jurisdiction
other than Pennsylvania.
(b) To the best of the knowledge of the Sellers after due
inquiry, the Company and CML have the power and authority (corporate and
otherwise) to own, lease or operate their properties and to carry on their
business as now conducted, and the Licenses represent all of the material
governmental or regulatory approvals, permits and licenses necessary for the
operation of the business of the Stores as presently conducted.
(c) As of the date hereof all of the issued and outstanding
shares of common stock of CML (the "Shares") are owned of record and
beneficially by Rubin. All of the issued and outstanding Shares are fully-paid
and non-assessable and have been duly authorized and issued.
5.2 CONSENTS, AUTHORIZATIONS AND BINDING EFFECT.
(a) The Sellers have full power and authority to execute and
deliver this Agreement and the other agreements and instruments to be executed
and delivered by the Sellers pursuant hereto, and to consummate the transactions
contemplated hereby and thereby. On or prior to the Closing Date, all acts and
other proceedings required to be taken by or on the part of the Sellers to
authorize it to carry out this Agreement and such other agreements and
instruments and the transactions contemplated hereby and thereby will have been
duly and properly taken. This Agreement has been duly executed and delivered by
the Sellers and constitutes, and such other agreements and instruments, when
duly executed and delivered by the Sellers, will constitute, legal, valid and
binding obligations enforceable in accordance with their respective terms
(subject, as to the enforcement of remedies, to applicable bankruptcy,
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reorganization, insolvency, moratorium or other similar laws and equitable
principles affecting the enforcement of creditors' rights generally from
time-to-time in effect). The execution and delivery by the Sellers of this
Agreement and such other agreements and instruments and the consummation of the
transactions contemplated hereby and thereby will not violate any law or
conflict with or result in any breach of or constitute a material default (or an
event which with notice or lapse of time or both would become a material
default) under, or result in the creation of a lien or encumbrance on any of the
Assets pursuant to, any indenture, mortgage, lease, agreement or other
instrument to which the Sellers are a party by which it or any of the Assets may
be bound or affected provided that the consents and approvals disclosed on
Schedule 5.2(a) have been obtained. Except as specifically disclosed on Schedule
5.2(a) hereto, and except for the matters described in Section 8.1, no approval,
authorization, consent or other order or action of or filing by the Sellers with
(i) any court, administrative agency, or other governmental authority or (ii)
party to one of the Assumed Contracts is required for the execution and delivery
by the Sellers of this Agreement or such other agreements and instruments or its
consummation of the transactions contemplated hereby or thereby.
(b) Rubin may execute, deliver and perform this Agreement, the
Non-Competition Agreements and all other agreements to be executed in connection
herewith without the necessity of obtaining any consent, approval, authorization
or waiver or giving any notice or otherwise. This Agreement constitutes and,
when executed and delivered, the Non-Competition Agreement will constitute the
legal, valid and binding obligations of Rubin enforceable in accordance with
their respective terms.
(c) The execution, delivery and performance of this Agreement
and the Non-Competition Agreements, assuming that the consents, approvals,
authorizations, waivers and notices set forth on Schedule 5.2(a) hereto are
obtained or given, will not:
(i) to the best of the knowledge of Sellers after due
inquiry, conflict with, result in a material breach of, constitute a default,
with or without notice and/or lapse of time, under, result in being declared
void or voidable any provision of, or result in any right to terminate or cancel
any of the Assumed Contracts or any contract, agreement, license or commitment
to which Sellers or any of their properties is bound and which is material to
the operations of the Company or CML;
(ii) constitute a material violation of any statute,
judgment, order, decree or regulation or rule of any court, governmental
authority or arbitrator applicable or relating to the Assets or the business of
the Company or CML to be acquired by Purchaser pursuant to this Agreement; or
(iii) result in (A) the acceleration of any material
debt or other obligation of the Sellers, except for debts and obligations
identified in Schedule 5.2(c)(iii) hereto
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which will be satisfied by the Sellers at the Closing; (B) the creation of any
Lien (as defined in Section 5.4) upon any of the Assets; or (C) the termination
or cancellation or right to terminate or cancel any obligation owed to the
Sellers.
5.3 FINANCIAL STATEMENTS AND FINANCIAL CONDITION.
(a) The books of account of the Company and CML, for years
prior to 1994, have not been maintained in accordance with applicable laws,
rules and regulations or with generally accepted accounting principles
consistently applied, insofar as such books and records understated the amounts
of income earned by the Sellers. However, accurate records of the true amount of
such income have been separately maintained by Sellers, which records have been
heretofore delivered to Purchaser. Such records are complete and accurate in all
material respects.
5.4 TITLE AND CONDITION OF ASSETS.
(a) Schedule 1.2(b) includes a complete list of all Personal
Property located at the Stores or used in the operation of the Stores. The
Sellers own good and marketable title to all of the Assets, including the
Personal Property, free and clear of liens, encumbrances, claims of third
parties, security interests, mortgages, pledges, agreements, options and rights
of others of any kind whatsoever, whether or not filed, recorded or perfected,
and including, without limitation, any conditional sale or title retention
agreement or lease in the nature thereof or any financing statements filed in
any jurisdiction or any agreement to give any such financing statements
(hereinafter collectively referred to as "Liens"), other than rights of third
parties under leases of tangible personal property disclosed on Schedule 5.11
hereto and liens for taxes not yet due and payable (hereinafter collectively
referred to as the "Permitted Encumbrances").
(b) The Assets constitute all assets that are material in or
to the operation of the business of the Company and CML as conducted in the
Stores. The Assets owned or leased are adequate to carry on the business of the
Company and CML as conducted in the Stores as it is now being conducted and,
except as set forth on Schedule 5.2(a) hereto, no consent of any third party is
required in order to transfer any of the Assets to the Purchaser (including
rights under the Assumed Contracts) based upon the change in control of the
Assets contemplated hereby. The Personal Property constituting part of the
Assets is in adequate operating condition for continued operation of all of the
Stores as presently conducted.
(c) The Pawn Pledge Advances represent the valid and binding
obligation of the obligors thereunder in accordance with their terms and were
entered into by CML and Rubin in good faith and in the ordinary course of
business. The collateral to be
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transferred to Purchaser in connection with the Pawn Pledge Advances was valued
by CML and Rubin in good faith and, to the best of knowledge of the Sellers
after due inquiry, the collateral is owned by the obligor under the applicable
Pawn Pledge Advance and is not stolen property.
5.5 [INTENTIONALLY DELETED]
5.6 LITIGATION AND COMPLIANCE.
(a) Subject to the matters set forth in 5.7 below, there are
no actions, suits, claims or proceedings, whether in equity or at law, or
governmental or administrative investigations pending or, to the best knowledge
of the Sellers, threatened, nor, to the best knowledge of the Sellers, is there
any reasonable basis for any such action, suit, claim or proceeding (i) by,
against or otherwise involving any of the Sellers or the Stores which, if
adversely determined would have a material adverse affect on the financial
condition or results of operation of the Company and/or CML, any of the Assets
or any asset or property of others leased or used in connection with the
business of the Stores pursuant to any agreement to which any of the Sellers is
a party or (ii) which questions or challenges the validity of this Agreement or
any action taken or to be taken pursuant to this Agreement.
(b) Subject to the matters set forth in 5.7 below, to the best
of the knowledge of the Sellers after due inquiry, the operations of the Company
and CML are and at all times have been in substantial compliance with, are not
currently in material default or violation in any material respect under, and
neither the Company nor CML have been charged with nor have the Company or CML
received any notice at any time of any violation of, any statute, law,
ordinance, regulation, decree or order applicable to the business or operations
of the Company or CML.
(c) Subject to the matters set forth in 5.7 below, neither the
Sellers, the Assets, nor the transactions contemplated under this Agreement, is
subject to any judgment, order or decree entered in any lawsuit or proceeding
applicable to the business and operations of the Company or CML.
(d) To the best of the knowledge of the Sellers after due
inquiry, other than for approximately five currency transaction reports which
Sellers have disclosed to Purchaser they inadvertently failed to file and which
are now the subject of an IRS investigation, the Sellers have duly filed or
caused to be filed all material reports and returns required to be filed by the
Sellers with all governmental authorities (including, without limitation, any
currency reporting requirements) and has obtained all material governmental
permits and licenses and other governmental consents (a complete list of which
permits, licenses and consents is set forth on Schedules 1.2(a) and 5.2(a)
hereto) which are required in connection with the business and
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operations of the Stores. To the best of the Sellers' knowledge no proceedings
for the suspension or cancellation of any of such permits, licenses or consents
is pending or threatened.
5.7 TAXES.
Sellers have disclosed to Purchaser that they are currently
the focus of a criminal investigation by the Internal Revenue Service and that a
Grand Jury has been impaneled for this purpose. The Sellers have admitted to the
IRS that their tax returns were incomplete in that they omitted certain amounts
of income for years prior to January 1, 1994. Sellers have cooperated with the
IRS and disclosed to it the amount of unreported income. Sellers have also
remitted to the Government substantial sums of money to be posted as a cash bond
pending the determination of their tax deficiencies.
5.8 EMPLOYEES AND CONTRACTORS.
(a) Schedule 5.8(a) hereto contains a list of all persons who
received compensation in respect of the operations of the Company or CML
(including compensation in the form of commissions and independent contractors'
fees) in excess of $25,000 during the last fiscal year or who are currently
receiving compensation (including compensation in the form of commissions and
independent contractors' fees) at a rate in excess of $25,000 per annum and a
description of all compensation arrangements (including without limitation,
salaries and bonus compensation) affecting them.
(b) The Company and CML have good relations with their
employees, independent sales people and contractors, and except as disclosed on
Schedule 5.8(b), have not received any material complaint from, and have not
engaged in any material dispute with, any of their employees, independent sales
people and contractors during the twelve (12) months prior to the date hereof.
Except as disclosed in Schedule 5.8(b), the Sellers are not aware of any
employee or independent sales person or contractor who plans to terminate
employment or association with the Company or CML whether currently or as a
result of the transactions contemplated hereby.
5.9 ERISA.
(a) Sellers never have had nor do they now have any employee
benefit plan (within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")). Included on Schedule 5.9 is
a list of each employment agreement which may not be terminated by the Sellers
without penalty or liability on notice of thirty (30) days or less or,
management or consulting agreement, severance pay plan, employee relations
policy, practice or arrangement, agreements with respect to leased or temporary
employees, vacation plan or arrangement, sick plan, stock purchase plan, stock
option plan,
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fringe benefit plan, bonus plan and any deferred compensation agreement, plan or
program covering any present or former employee of the Company or CML.
5.10 LABOR RELATIONS.
(a) No employees of the Company or CML are covered by any
collective bargaining agreement.
(b) To the best of the knowledge of the Sellers after due
inquiry, the Company and CML have complied, and are currently in compliance, in
all material respects with any applicable laws (including, without limitation,
ERISA rules and regulations relating to the employment of labor, including,
without limitation, those relating to wages, hours, unfair labor practices,
discrimination and payment of social security and similar taxes with respect to
their respective employees.
(c) To the best of the knowledge of the Sellers after due
inquiry, neither the Company nor CML have engaged in or are currently engaging
in, any unfair labor practice. No complaint against the Company or CML is
currently pending or, to the best knowledge of the Sellers, threatened before
the National Labor Relations Board or any state or local labor agency by or on
behalf of any employee of the Company or CML; no representation questions,
arbitration proceedings, labor strikes, slow-downs or stoppages, material
grievances or other labor troubles are currently pending or, to the best
knowledge of the Sellers, threatened with respect to any of the Company's or
CML's employees.
5.11 CONTRACTS.
(a) All material contracts, leases, agreements, licenses,
commitments and purchase orders to which the Company or CML is a party or by
which the Company or any of the Assets is bound and which fall within the
categories set forth below are listed on Schedule 5.11(a) hereto. Also indicated
on Schedule 5.11(a) is whether such contract, etc. is with a related party or
affiliate of the Sellers or any immediate family member thereof. The contracts,
leases, agreements, licenses, etc. required to be disclosed on Schedule 5.11(a)
shall fall in one or more of the following categories:
(i) contracts or agreements with respect to which,
individually, the amount reasonably expected to be received or paid by the
Company or CML in the future exceeds $10,000 annually in the aggregate;
(ii) joint venture contracts or arrangements or other
agreements involving a sharing of profits or expenses;
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(iii) confidentiality, non-competition or non-disclosure
agreements;
(b) contracts or agreements restricting the ability of the Sellers
to sell or transfer any of the Assets; and
(i) contracts or arrangements involving any restriction with
respect to the geographical area of operations or scope or type of business of
the Company or CML.
For purposes of this Agreement, only those contracts indicated
with an asterisk on Schedule 5.11(a) shall be deemed to be "Assumed Contracts."
(c) All of the Assumed Contracts are valid and in full force
and effect and constitute the legal, valid and binding obligations of the
Company or CML, as indicated, and the other parties thereto and there are no
existing material defaults by the Sellers or by any other party thereto and no
event, act or omission has occurred which (with or without notice, lapse of time
and/or the happening or occurrence of any other event) would result in a
material default thereunder. No other party to any of such Assumed Contracts has
in writing asserted the right, and to the current actual knowledge of the
Sellers, no basis exists for the assertion of any enforceable right, to
renegotiate, or cancel or terminate prior to the full term thereof, any of the
terms or conditions of any of such Assumed Contracts nor do the Sellers, have
knowledge that any party to any of such Assumed Contracts would refuse to renew
such Assumed Contract upon termination of its current term.
(d) Except as disclosed in Schedule 5.2(a), no consent of any
party to any of the Assumed Contracts is required for the execution, delivery or
performance of this Agreement or the consummation of the transactions
contemplated hereby, including, but not limited to, the assignment to the
Purchaser of the Leases for the Stores.
(e) Sellers have heretofore delivered to Purchaser true,
correct and complete copies of all of the Assumed Contracts, as amended or
supplemented, as well as summaries of the current rents, additional rents and
other payments due pursuant to the terms thereof.
5.12 ABSENCE OF CERTAIN CHANGES, ETC. Since the time of Purchaser's
due diligence visit to Sellers' corporate offices (the "Due Diligence Date") and
subject to the matters disclosed in 5.7 above, there has been no material
adverse change in the Assets (including the fair market value thereof),
business, operations, financial condition or prospects of the Company or CML or
in the condition of any of the Assets, or the assets or properties of others
leased or used by the Company or CML and, to the best knowledge of the Sellers,
there are no events
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with respect to any of the foregoing that threaten to disrupt, prevent or impair
in a materially adverse manner the conduct of the Company's or CML's business
going forward.
Since the Due Diligence Date, the Company and/or CML has not:
(a) experienced any damage, destruction or loss to or of any
of its or their material assets, whether or not covered by insurance;
(b) increased or agreed to make any increase in the
compensation payable to any employee or independent contractor, other than in
the ordinary course of business;
(c) conducted its operations or participated in any
transaction otherwise than in the ordinary course of business;
(d) entered into any transaction or contract, or amended or
terminated any transaction or contract which transaction or contract, or
amendment or termination thereof, might to the knowledge of the Sellers have a
material adverse effect on the financial condition, business or operations of
the Company or CML;
(e) cancelled or waived any claim or right of substantial
value or sold, transferred, distributed or otherwise disposed of any of its
assets, except for a fair consideration in the ordinary course of business;
(f) other than as specifically referred to herein, distributed
any of its property or assets to Rubin;
(g) incurred any obligation or liability (absolute or
contingent) in all cases exceeding $10,000 in the aggregate;
(h) discharged or satisfied any lien or encumbrance or paid
any obligation or liability (absolute or contingent) other than liabilities
disclosed in the Schedules hereto or current liabilities incurred since the date
of the Financial Statements in the ordinary course of business;
(i) mortgaged, pledged or subjected to any Lien (as defined
Section 5.4) or charge or any other encumbrance, any assets, tangible or
intangible, other than the lien of current state or local property taxes not yet
due;
(j) received notice or had knowledge of any labor trouble or
union organizing activity other than routine matters, none of which is material,
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(k) knowingly waived any rights of substantial value, whether
or not in the ordinary course of business;
(l) failed to pay all debts (including all trade accounts
payable) and obligations promptly as they became due, or in advance or otherwise
to the extent consistent with prior practice, delayed the payment of any debt or
obligation after such date except in the case of a bona fide dispute over the
amount thereof; or
(m) entered into any agreement, commitment, letter of intent
or other contract providing for any of the foregoing actions.
5.13 COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as disclosed on
Schedule 5.13, the Sellers have not used, treated, stored or disposed of
hazardous waste or toxic substances on any store property owned or leased by the
Company (whether owned, leased, subleased or used, the "Property") in violation
of any federal, state or local environmental protection, toxic substance, human
health or similar statute, regulation or ordinance (collectively, the
"Environmental Laws"), and, to the best of the Sellers' knowledge, after due
inquiry, there have been no spills or releases of hazardous substances on or
from any Property that, in any such case, could subject the owner or occupier of
the Property to liability. The Property and all operations conducted on such
Property during the period of the Company's or CML's ownership or occupancy have
been in compliance with all Environmental Laws. The Sellers have not received
any notice, nor are aware, of any administrative or judicial investigations,
proceedings or actions with respect to violations, alleged or proven, of any
Environmental Law by the Company, CML or sub-lessee or any lessor of the Company
or CML, if any, or otherwise involving the Property or the operations conducted
on the Property. No asbestos containing material is present in any of the
improvements on any Property or is otherwise located on any Property. To the
best of the knowledge of the Sellers after due inquiry, all operations conducted
on the Property are in compliance with all federal and state statutes and
regulations relating to asbestos. Except as disclosed on Schedule 5.13, to the
best of the knowledge of the Sellers after due inquiry, no underground storage
tanks, whether in use or closed, are on or under any Property. Sellers have no
knowledge of any use, storage or disposal of hazardous waste or toxic substances
on the Property by any prior user or owner of the Property.
5.14 NO TAKING. Subject to the matters disclosed in 5.7 hereof, the
Sellers have not received notice of any pending, threatened, proposed or
contemplated eminent domain or condemnation proceeding or similar taking, with
or without payment of compensation therefor, or any pending or threatened
rezoning affecting the real property which is the subject of the Leases included
among the Assumed Contracts.
5.15 [INTENTIONALLY DELETED].
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5.16 ADA MATTERS. The Sellers have not received any notification,
nor are aware of any circumstance, regarding any of the real property which is
the subject of the Leases which would require that the lessee under any such
Leases make any additions, renovations or improvements to such property pursuant
to the terms of the Americans With Disabilities Act ("ADA") or otherwise;
provided however that the Sellers specifically disclaim any warranty or
representation that said property in its current state conforms to the ADA.
5.17 ACCURACY OF STATEMENTS. Neither this Agreement nor any
schedule, exhibit, statement, list, document, certificate or other information
furnished or to be furnished by or on behalf of the Sellers to Purchaser or any
representative or affiliate of the Purchaser in connection with this Agreement
or any of the transactions contemplated hereby contains or will contain any
untrue statement of a material fact or omits or will omit to state a material
fact necessary to make the statements contained herein or therein, in light of
the circumstances in which they are made, not misleading. All representations,
covenants and warranties made by or on behalf of the Sellers in this Agreement
shall, pursuant to Section 10.1 hereof, survive the execution and delivery of
this Agreement and the closing of the transactions contemplated hereby.
* * *
In defending a claim based upon the breach of any representation,
warranty or covenant contained in this Agreement, the Sellers shall not assert
as a defense thereto that Purchaser had constructive knowledge of the falsehood
of any such representation, warranty or covenant.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser
represents and warrants to the Sellers, as follows:
6.1 ORGANIZATION AND GOOD STANDING. Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania.
6.2 CONSENTS, AUTHORIZATIONS AND BINDING EFFECT.
(a) Purchaser may execute, deliver and perform this Agreement,
the Non-Competition Agreements and all other agreements to be executed in
connection herewith without the necessity of obtaining any consent, approval,
authorization or waiver or giving any notice or otherwise, except for such
consents, approvals, authorizations, waivers and notices set forth on Schedule
6.2 hereto.
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(b) This Agreement and the Non-Competition Agreements have
been duly and validly authorized by Purchaser and this Agreement constitutes
and, when executed and delivered, the Non-Competition Agreements will constitute
the legal, valid and binding obligation of Purchaser enforceable in accordance
with their respective terms. The execution, delivery and performance of this
Agreement will not:
(i) constitute a violation of the Articles of
Incorporation or the By-Laws, as amended, of Purchaser;
(ii) constitute a material violation of any statue,
judgment, order, decree or regulation or rule of any court, governmental
authority or arbitrator applicable or relating to Purchaser.
6.3 FINANCIAL STATEMENTS AND FINANCIAL CONDITION OF MONETARY
MANAGEMENT CORPORATION.
(a) Annexed as Schedule 6.3(a) hereto are the audited
financial statements of Monetary Management Corporation ("MMC") for the twelve
month period ended December 31, 1993, and for the six month period ended June
30, 1994 and its unaudited financial statements for the five month period ended
November 30, 1994 (collectively, the "Financial Statements") and the balance
sheets included therein (the "Balance Sheets").
(b) The Financial Statements have been prepared in accordance
with the books of account of MMC, in conformity with generally accepted
accounting principles consistently applied, and present fairly the financial
position of MMC as of the date of the Financial Statements and the results of
operations of MMC for the periods covered thereby; provided, however that the
Financial Statements for the five month period ended November 30, 1994 may not
contain all adjustments or footnotes necessary under generally accepted
accounting principles.
(c) MMC has no liabilities (absolute, contingent or otherwise)
which, in accordance with generally accepted accounting principles, are required
to the reflected, reserved or otherwise disclosed in its Balance Sheets which
are not reflected, reserved or otherwise disclosed in said Balance Sheet except
(i) those incurred since the date of the November 30, 1994 Balance Sheet in the
ordinary course of business, consistent with past practice, in arm's length
transactions with unrelated parties, and which do not have and cannot reasonably
be expected to have, in the aggregate, a material adverse effect on the
business, operations, financial condition or prospects of MMC.
(d) Since the date of the November 30, 1994 Financial
Statements, there has been no material adverse change in the business,
operations, financial condition or
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prospects of MMC and to the best knowledge of MMC there are no events with
respect to any of the foregoing that threaten to disrupt, prevent or impair in a
materially adverse manner the conduct of MMC's business going forward.
6.4 LITIGATION. No actions, suits, claims, proceedings or
investigations (whether or not purportedly on behalf of or against Purchaser),
are pending or threatened against Purchaser at law or in equity that relate to
the transactions contemplated by this Agreement or that will prohibit Purchaser
from performing the obligations to be performed by it hereunder.
* * *
In defending a claim based upon the breach of any representation,
warranty or covenant contained in this Agreement, Purchaser shall not assert as
a defense thereto that the Sellers had constructive knowledge of the falsehood
of any such representation, warranty or covenant.
SECTION 7. COVENANTS OF THE PARTIES.
7.1 ACCESS TO RECORDS AND PROPERTIES. Between the date of this
Agreement and the Closing Date, the Sellers shall give to Purchaser such access
to the premises, books and records of the Sellers and shall cause the officers
and employees of the Company and CML to furnish such financial and operating
data and other information as Purchaser may from time to time reasonably
request. Purchaser agrees to refrain from conducting any on-site due diligence
at the Stores and from contacting employees of the Stores without Rubin's prior
consent which shall not be unreasonably withheld. Pending the Closing, all of
such information not in the public domain shall be maintained confidentially by
Purchaser and not used for any purpose other than in connection with the
transactions contemplated hereby. The financial information seized by the IRS
from Sellers and currently in its possession shall not, for the purposes of this
Agreement, be deemed to be in the public domain. From and after the Closing
Date, the Sellers shall give to Purchaser free and unrestricted access to the
books, files and records of the Sellers relating to the operations of the Stores
for the period prior to and including the Closing Date retained by the Sellers,
if any, and Purchaser shall give to Rubin reasonable access to the books, files
and records transferred to Purchaser's control relating to the business and
operations of the Stores prior to the Closing, as Rubin shall from time to time
reasonably request. Prior to the destroying or disposing of such books, files
and records, the Sellers and Purchaser shall give thirty (30) days' notice to
the other of the intended destruction or disposition, and the other, at its
option, shall have the right to take possession of the same or to make copies of
the same at their or its expense. Purchaser shall, after the Closing, provide
Sellers reasonable access and make available for copying relevant books and
files and records regarding the Stores as Sellers need to defend any tax claim
or proceeding.
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Any investigation or access pursuant to this Section 7.1 shall be
conducted in such manner as not to interfere unreasonably with the operation of
the business of the other party.
7.2 OPERATION OF THE COMPANY. From and after the date hereof and
until the Closing, the Sellers shall:
(a) Operate the Stores diligently and only in the usual,
ordinary manner and, to the extent consistent with such operations, use their
best efforts to (i) preserve the current business organizations of the Stores
intact, and (ii) preserve current relationships with employees of the Stores and
all other persons having business dealings with the Company, CML and/or the
Stores.
(b) Maintain books, accounts and records in the usual and
ordinary manner, and in a manner that fairly and correctly reflects income,
expenses, assets and liabilities in accordance with generally accepted
accounting principles.
(c) Comply with all Federal, state, local and other
governmental (domestic or foreign) laws, statutes, ordinances, rules,
regulations, orders, writs, injunctions, decrees, awards or other requirements
of any court or other governmental or other authority or body applicable to the
Company, CML, the Assets or the Stores or to the conduct of their business, and
to substantially perform all of their obligations under all contracts,
agreements, franchises, licenses, permits instruments, undertakings or otherwise
without default.
(d) Except in the ordinary course of business, make no change
in the compensation payable or to become payable to any employee; make no change
in any existing, and enter into no new, arrangement or contract relating to
management, executive or clerical services or relating to the sharing of
administrative or other overhead or any management or supervisory fee; establish
or make no bonus, stock option, profit sharing, retirement or other similar
payment, plan or arrangement except as otherwise provided herein for in the
ordinary course of the administration of existing incentive, welfare, retirement
or other similar plans or arrangements hereinabove referred to; and enter into
no union contract and no employment agreement, or agreement with any salesman or
sales agent or any franchise agreement, independent dealer/distributor agreement
or other contract or arrangement with respect to the performance of services.
(e) Not enter into, modify or extend any Assumed Contract, or
engage in any activity or transaction not substantially in the ordinary course
of business and in accordance with past practice.
(f) Not sell or dispose of any capital assets.
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(g) Not mortgage, pledge or subject to any Lien (as defined in
Section 5.4) or charge or other encumbrance, any assets, tangible or intangible,
other than the lien of current state or local property taxes not yet due.
(h) Not make any agreement, commitment or arrangement to take
any action materially inconsistent with the obligations under, or prohibited by,
the foregoing paragraphs.
7.3 CONSENTS AND NOTICES. Promptly after the date hereof, the
Sellers shall use its best efforts to obtain all consents, waivers, approvals
and authorization listed in Schedules 1.2(a) and 5.2(a) hereto which may be
necessary from third parties to effectuate this Agreement and to consummate the
transactions contemplated hereby in accordance with the terms hereof and shall
give all notices to third parties required to be given by the Sellers in
contemplation and as a result of the transactions contemplated by this
Agreement. It shall however be the responsibility of the Purchaser to obtain all
permits, licenses and approvals necessary to enable Purchaser to operate the
Stores and Purchaser agrees to diligently pursue all such licenses, permits and
authorizations.
7.4 COMPETING TRANSACTIONS. Prior to the Closing Date (as such date
may be extended by agreement of the parties), the Sellers shall not take any
action, directly or indirectly, to negotiate, cause, promote, authorize or agree
to any transaction competing or interfering with any of the transactions
contemplated by this Agreement, including, without limitation, any merger,
consolidation or reorganization, or acquisition or disposition of the equity
securities of the Company and as of the date hereof shall cease all discussions
with any other potential acquirors of the Assets.
7.5 BEST EFFORTS TO SATISFY CONDITIONS. The Sellers shall use their
best efforts to cause the conditions to the obligations of Purchaser contained
herein to be satisfied to the extent that the satisfaction of such conditions is
in the control of the Sellers, and Purchaser shall use its best efforts to cause
the conditions to the obligations of the Sellers contained in Section 9 hereof
to be satisfied to the extent that the satisfaction of such conditions is in the
control of Purchaser; however, the foregoing shall not constitute a limitation
upon the covenants and obligations of the Sellers and Purchaser otherwise
expressly set forth in this Agreement.
7.6 CONFIDENTIALITY. Purchaser agrees that for and in consideration
of the Sellers' cooperation and disclosure of sensitive business information,
Purchaser shall hold in the highest degree of confidentiality any and all
information received from the Company and designated in writing as
"Confidential" and not publish the same to any party not directly involved in
Purchaser's acquisition of the Assets; provided, however, that Confidential
property shall not include any information which (1) is already known to
Purchaser; or (2) is or becomes publicly known to Purchaser through no wrongful
act of Purchaser; or (3) is rightfully received
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by Purchaser from third-party without authorization of the Sellers; or (5) is
furnished by the Sellers to a third-party without a similar restriction on the
third-party's rights; or (6) is disclosed pursuant to a requirement of a
governmental agency or disclosure is required by operation of law.
7.7 PUBLICITY. Without the consent of Rubin, Purchaser will not
disclose in any manner to any third party that the parties have entered into
this Agreement other than its lenders, attorneys, accountants, the IRS and any
licensing authorities and no public announcement of the existence of this
Agreement shall be made by any party without the prior consent of the others.
7.8 EXCLUSIVE DEALING. After execution of this Agreement and prior
to the Closing Date (as such date may be extended by agreement of the parties),
the Sellers will not offer the Shares or the Assets for sale to any person other
than Purchaser nor will the Sellers enter into negotiations with any other party
for the disposition of the Shares or the Assets and the Sellers agree that the
Sellers will not negotiate with any other parties relative to any disposition of
the Shares or the Assets or any part thereof. Furthermore, the Sellers will not,
directly or indirectly, through any officer, director, agent or otherwise,
solicit or initiate, directly or indirectly, or encourage submission of
inquiries, proposals or offers from any potential buyer, other than Purchaser,
or participate in any discussions or negotiations regarding, or furnish to any
person any information with respect to the disposition of the Shares or the
Assets.
SECTION 8. CONDITIONS TO OBLIGATIONS OF PURCHASER. The obligations
of Purchaser to consummate the purchase and sale of the Assets under this
Agreement are subject to the satisfaction of the following conditions, each of
which may be waived by Purchaser. Any such waiver by Purchaser shall not reduce
or impair Purchaser's right to seek indemnification hereunder in respect of the
failure to meet the condition that shall have been waived.
8.1 TAX MATTERS. The receipt by Purchaser of satisfactory assurances
from the Internal Revenue Service ("IRS") stating that it will not pursue
satisfaction of any claim they may have regarding the Company and/or the
Shareholders against the Stores, the Assets, the Purchaser or any affiliate
thereof and no notice of objection to the sale by the Pennsylvania State or
Philadelphia tax authorities is received. This agreement does not limit the IRS'
ability to engage in any enforced collection activity against any amounts due
Sellers hereunder.
8.2 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS.
(a) The representations and warranties of the Sellers set
forth in Section 5 hereof and in all agreements, documents and instruments
executed and delivered pursuant hereto or in connection with the Closing of the
transactions contemplated hereunder shall have
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been, on the date hereof and shall be on the Closing Date, true and correct in
all material respects as though made on and as of the Closing Date.
(b) The Sellers have materially performed the agreements and
obligations necessary to be performed by them under this Agreement prior to the
Closing Date, and performed in accordance with the covenants set forth in
Section 7 hereof. Without limiting the generality of the foregoing, the Sellers
shall have obtained all consents, waivers, approvals and authorizations, and
shall have given all notices to third parties, as in the aggregate are necessary
to convey, sell, transfer, assign and deliver to Purchaser all of the Assets and
to vest in Purchaser all right, title, interest and claims of the Sellers in,
to, relating to or arising under the Assets, free and clear of any Liens (as
defined in Section 5.4); excluding, however, the consents, licenses, permits and
approvals to be obtained by Purchaser as described above.
(c) The continued operation of the Stores in the normal course
of business between the date hereof and the Closing Date.
(d) The absence of any material deterioration (or alteration)
of the Assets or the value thereof between the date hereof and the Closing Date,
including but not limited to loss of customers, employee/management attrition,
destruction of equipment, force majeure and declaration of war.
(e) The Sellers shall have delivered to Purchaser a
certificate to the effect that the conditions set forth in subparagraphs 8.1(b)
and 8.1(c) above have been satisfied.
8.3 TRANSFER OF ASSETS. The Sellers shall have delivered to
Purchaser such bills of sale with covenants of warranty, assignments, special
warranty deeds with covenants against grantor's acts only, and other good and
sufficient instruments of transfer and conveyance, in form and substance
reasonably satisfactory to Purchaser and its counsel, as shall be effective to
vest in Purchaser, and to evidence the vesting in Purchaser of, good and
marketable title to the Assets as provided for, and subject to the limitations
and exceptions set forth, in this Agreement.
8.4 OPINION OF COUNSEL TO THE SELLERS. Purchaser shall have received
the opinion of legal counsel for the Sellers satisfactory to the Purchaser,
dated the Closing Date, in form reasonably satisfactory to Purchaser.
8.5 BANK APPROVAL. Purchaser shall have received a final approval
from its primary bank(s) regarding the acquisition of the Assets. Purchaser has
represented that it has received an informal approval of the subject sale and
will, as soon as practicable hereafter, seek final approval and will cooperate
with such institutions in whatever way necessary to obtain their final approval.
8.6 NO ADVERSE CHANGE; MATERIAL DISCREPANCIES. There shall not have
occurred or come to the knowledge of Purchaser between the date hereof and the
Closing Date
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any circumstances which in the aggregate have a material adverse effect on
Purchaser's valuation of the operations, condition (financial or otherwise),
assets or business of the Company and/or CML and the Sellers shall have
delivered to Purchaser a certificate stating that they are not aware of any such
occurrence.
Purchaser, through its attorneys, accountants, employees, agents or
assignees, shall not have discovered, in the course of its due diligence review
of the transactions contemplated hereby, that the financial condition or history
of operations of the business of the Company, CML and/or the Stores is
materially different than the condition and/or history represented to Purchaser
by Rubin in the context of the negotiation of the instant acquisition.
8.7 GOVERNMENTAL AND OTHER APPROVALS. Subject to Section 27 below,
any licenses, permits, approvals, consents, authorizations and waivers by
governmental agencies or private parties necessary or desirable to consummate
the transactions contemplated by this Agreement as set forth on Schedules 1.2(a)
and 5.2(a) hereto, shall have been obtained on terms reasonably satisfactory to
Purchaser, including, but not limited to, any licenses required to operate the
Stores.
8.8 NON-COMPETITION AGREEMENTS. Rubin, the Company, Alison Rubin and
CML shall each have delivered to Purchaser an executed Non-Competition
Agreement, in the form annexed hereto as Exhibit C.
8.9 RELATIONSHIPS; EMPLOYEES. The Sellers make no representation
that any employee of the Company will accept employment with the Purchaser
following the Closing Date. However, the Sellers will (i) cooperate in
permitting Purchaser to discuss employment with the employees and executives of
the Stores and will encourage such persons to accept any proffered employment
and will not interfere in any negotiations between Purchaser and such persons
with regard to such employment; and (ii) take no action which will impede the
goodwill of customers and others having a business relationship with the
Company, CML and/or the Stores and take no action which will impede Purchaser
and its representatives in their efforts to persuade such persons to continue
such relationship with Purchaser after the Closing Date.
8.10 [INTENTIONALLY DELETED].
8.11 OTHER MATTERS. The Sellers shall have furnished, or caused to
be furnished, to Purchaser, in form and substance satisfactory to Purchaser,
such certificates and other evidence as Purchaser may have reasonably requested
as to the satisfaction of the conditions contained in this Section and as to
such other matters relating to the representations, warranties, covenants and
undertakings in this Agreement as Purchaser may reasonably request.
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SECTION 9. CONDITIONS TO OBLIGATIONS OF THE SELLERS. The obligations
of the Sellers to consummate the sale and purchase under this Agreement and the
obligations of Rubin, the Company, Alison Rubin and CML to execute and deliver
the Non-Competition Agreements are subject to the satisfaction of the following
conditions, each of which may be waived by the Sellers. Any such waiver shall
not reduce or impair the Sellers' right to seek indemnification hereunder in
respect of the failure to meet the condition that shall have been waived.
9.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS.
(a) The representations and warranties of Purchaser set forth
in Section 6 hereof and in all agreements, documents and instruments executed
and delivered pursuant hereto or in connection with the Closing of the
transactions contemplated hereunder shall have been and be true and correct in
all respects at all times commencing with the date of this Agreement and ending
with and on the Closing Date as though made on and as of the Closing Date.
(b) Purchaser shall have performed the agreements and
obligations necessary to be performed by it under this Agreement prior to the
Closing Date.
(c) Purchaser shall have delivered to Sellers a certificate,
executed by Purchaser, to the effect that the conditions set forth in
subparagraphs 9.1(a) and 9.1(b) above have been satisfied.
9.2 OPINION OF COUNSEL TO PURCHASER. The Sellers shall have received
the opinion of Klehr, Harrison, Harvey, Branzburg & Ellers dated the Closing
Date, in form reasonably satisfactory to the Sellers.
9.3 JUDGMENT NOTE. Purchaser shall have delivered the Judgment Note
on the Closing Date, pursuant to Section 3 hereof.
9.4 NON-COMPETITION AGREEMENTS. Purchaser shall have delivered to
Seller an executed Non-Competition Agreement, in the form annexed hereto as
Exhibit C.
9.5 NO ADVERSE CHANGE. There shall have been no developments since
the date of this Agreement materially adversely affecting the financial
condition of Purchaser and its ability to perform its obligations under the
Promissory Note.
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<PAGE>
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; AND SET-OFF.
10.1 SURVIVAL. The representations, warranties and agreements made
in Sections 5 and 6 hereof and in the Schedules hereto by Purchaser and the
Sellers shall remain operative and in full force for four (4) years after the
Closing Date except with respect to tax matters as to which such representations
and warranties shall continue to survive for the period of any applicable
statutes of limitation.
10.2 INDEMNIFICATION BY THE SELLERS. The Sellers hereby jointly and
severally agree to defend, indemnify and hold Purchaser and its officers,
directors, shareholders, agents and affiliates and their respective successors
and assigns (for purposes of this Section 10.2, collectively, the "Purchaser")
harmless from and against any and all losses, liabilities (accrued, absolute,
contingent or otherwise), suits, proceedings, demands, settlements, judgments,
fines, assessments, damages, expenses and costs (including reasonable attorneys'
fees and litigation expenses) (collectively, the "Indemnifiable Damages") which
Purchaser may suffer or incur by reason of, or which may arise out of: (i) the
inaccuracy of any of the representations and warranties of the Sellers contained
in this Agreement; (ii) the breach by the Sellers of any of the covenants,
warranties or agreements made by them in this Agreement; (iii) any claim for
payment of any liability of the Sellers not specifically assumed by the
Purchaser pursuant hereto; or (iv) any legal obligation to remediate any
environmental condition resulting from the Sellers' operation of the Property
prior to the Closing Date, provided, however, that the Sellers shall only be
liable with respect to any Indemnifiable Damages if the aggregate Indemnifiable
Damages, singly or in the aggregate, equal or exceed $10,000 and then only to
the extent of any such excess. In no event shall the Sellers be obligated under
this Section to indemnify Purchaser to the extent any claim results from
Purchaser's gross negligence or willful misconduct. In no event shall the
Sellers be obligated to indemnify Purchaser for Indemnifiable Damages in excess
of the Purchase Price. Not withstanding anything contained in this Section 10 to
the contrary, Purchaser shall have the right to set off, against amounts due
under the Promissory Note, any amounts due or claimed in good faith to be due to
Purchaser under this Section 10 or Section 11.
10.3 INDEMNIFICATION BY PURCHASER. Purchaser hereby agrees to
defend, indemnify and hold the Sellers harmless from and against any
Indemnifiable Damages which they may suffer or incur by reason of or which may
arise out of: (i) the inaccuracy of any of the representations and warranties of
Purchaser contained in this Agreement; (ii) the breach by Purchaser of any of
the covenants, warranties or agreements made by it in this Agreement; (iii) any
claim for payment of any liability assumed by Purchaser hereunder or otherwise
relating to the ownership or operation of the Stores after the Closing Date,
including, but not limited, to any such liability arising after the Closing Date
under the Assumed Contracts. In no event shall
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Purchaser be obligated under this Section to indemnify the Sellers to the extent
any claim results from their gross negligence or willful misconduct.
10.4 NOTICE AND RIGHT TO DEFEND THIRD PARTY CLAIMS.
(a) Promptly upon receipt of notice of any third party claim,
demand or assessment or the commencement of any suit, action or proceeding in
respect of which indemnity may be sought on account of an indemnity agreement
contained in this Section 10, the party seeking indemnification (the
"Indemnitee") shall notify in writing, within sufficient time to respond to such
claim or answer or otherwise plead in such action, the party or parties from
whom indemnification is sought (the "Indemnitor") thereof; provided, however,
that failure or delay to supply such notice shall not relieve Indemnitor of its
indemnification obligation hereunder except to the extent that Indemnitor is
actually prejudiced by such failure or delay.
(b) In case any claim, demand or assessment is asserted or
suit, action or proceeding commenced against an Indemnitee (collectively a
"Claim"), and it notifies the Indemnitor of the commencement thereof, if the
Indemnitor acknowledges its indemnification obligations therefor hereunder, then
the Indemnitor shall be entitled to participate therein, and, to the extent that
it may wish, to assume the defense, conduct or settlement thereof, with counsel
satisfactory to the Indemnitee, whose consent to the selection of counsel shall
not unreasonably be withheld. After notice from the Indemnitor to the Indemnitee
of its election to assume the defense, conduct or settlement thereof, the
Indemnitor shall not be liable to the Indemnitee for any legal or other expenses
subsequently incurred by the Indemnitee in connection with the defense, conduct
or settlement thereof; provided, however, that if the Indemnitee has any
separate defense from that of the Indemnitor, the Indemnitee shall have the
right to be represented by its own counsel at the Indemnitee's expense. The
Indemnitee shall have the right in any event to participate in any such defense
with its own counsel at its own expense. The Indemnitee will cooperate with the
Indemnitor in connection with any such Claim and make personnel, books and
records relevant to the Claim available to the Indemnitor at Indemnitor's
expense. In the event that the Indemnitor fails timely to defend, contest or
otherwise protect against any such Claim, the Indemnitee shall have the right to
defend, contest or otherwise protect against the same and may make any
compromise or settlement thereof and recover the entire cost thereof from the
Indemnitor, including, without limitation, reasonable attorneys' fees,
disbursements and all amounts paid as a result of such claim or compromise or
settlement thereof.
(c) Anything to the contrary herein notwithstanding, prior to
finally settling any such Claim, the Indemnitor shall give to the Indemnitee
prompt notice of its intention to settle the same and the terms of such proposed
settlement and acknowledging their indemnification responsibility there for
hereunder. If the Indemnitee shall object to such proposed settlement within 20
calendar days, then the Indemnitee shall thereafter, at its sole
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<PAGE>
expense, assume the control and defense of such claim, suit, action,
investigation or proceeding and in such event the liability of the Indemnitor
shall be limited to the amount for which the same could have been settled as
proposed by the Indemnitor. If the Indemnitee does not object to the terms of
the proposed settlement within the aforesaid 20 calendar day period, then the
Indemnitor shall have the right to consummate such proposed settlement upon the
terms set forth in the aforesaid notice.
10.5 PAYMENT OF AMOUNTS DUE. The amount of any indemnifiable damages
conceded or determined to be due from the Sellers to Purchaser, pursuant to any
of the provisions of this Section 10, shall be paid by the Sellers to Purchaser
within ten (10) business days from the date so conceded or determined. The
amount of any indemnifiable damages conceded or determined to be due from
Purchaser to the Sellers, pursuant to any of the provisions of this Section 10,
shall be paid to Sellers by Purchaser within ten (10) business days from the
date so conceded or determined.
SECTION 11. BULK TRANSFER LAWS. Purchaser hereby waives compliance
with the provision of any so called Bulk Transfer Laws of any jurisdiction in
connection with the sale of the Assets. The Sellers hereby indemnify and hold
harmless the Purchaser against any and all liabilities which may be asserted by
third parties against the Purchaser as a result of non-compliance with any such
Bulk Transfer Laws.
SECTION 12. FURTHER ACTIONS. From time to time the parties shall
execute and deliver, or cause to be executed and delivered, such documents and
instruments and shall take, or cause to be taken, such further or other actions
as are necessary or desirable to carry out the intent and purposes of this
Agreement, to convey, transfer, assign and deliver to Purchaser, and its
successors and assigns, the Assets (or to evidence any of the foregoing) and to
consummate and give effect to the other transactions, covenants and agreements
contemplated hereby.
SECTION 13. TERMINATION. This Agreement shall terminate and shall be
of no further force or effect:
(i) as provided in Sections 8 or 9 hereof;
(ii) Upon mutual agreement of the parties;
(iii) Upon notice given by the Purchaser or the Sellers
in the event the Closing has not occurred on or before March 31,
1995 due to a circumstance not resulting from or caused by any act
or omission of the party giving such notice;
(iv) Upon notice given by the Purchaser or the Sellers
to the other party in the event a law, regulation or judicial decree
prohibits the Closing; or
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(v) Upon notice given by the Purchaser or the Sellers to
the other party in the event that any representation or warranty
made by the other party herein was incorrect in any material respect
when made; or that such other party has failed to perform any
covenant contained herein in any material respect and such failure
has continued for thirty (30) business days following notice of such
failure; or that a condition to the obligation of such party as set
forth herein is not satisfied as of March 31, 1995.
SECTION 14. CERTAIN LEASES; RIGHT OF FIRST REFUSAL.
(a) Rubin owns the real estate in which the Stores indicated
as numbers 1, 2, 6, 7, 15, 20, 21, 22 and 27 are located (the "Rubin Stores").
Notwithstanding anything contained herein to the contrary, as of the Closing
Date, the Purchaser shall enter into standard form triple net leases, in form
acceptable to the parties, with Rubin regarding each of the Rubin Stores. Such
leases shall be for an initial five (5) year period at a monthly rental of
$1,800.00 with an option of Purchaser to extend for a further period of five (5)
years at a rent equal to $1,890.00 per month. As to the Stores 3 and 17, in
addition to monthly rental due the lessor thereunder, for the balance of the
term of such leases, Purchaser shall pay to Rubin the difference between such
monthly rent and $1,800.
(b) Sellers hereby grant to Purchaser the right of first
refusal to buy the stores numbered 10 and 26 on Schedule A.
SECTION 15. EXPENSES; BROKERS.
(a) Except as otherwise specifically provided herein, the
Sellers and Purchaser shall bear their own legal fees and other costs and
expenses with respect to the negotiation, execution and the delivery of this
Agreement and the consummation of the transactions hereunder, and the Assets
shall not be reduced or impaired by the payment or accrual of any such costs and
expenses. Any sales, use, conveyance or transfer taxes ("Tax") relating to the
conveyance of the Assets, if applicable, in connection with the transactions
contemplated herein shall be paid by the party on whom such liability is imposed
by applicable law.
(b) The Purchaser, on the one hand, and the Company and the
Shareholders, on the other, represent and warrant each to the other that they
have not engaged the services of any broker or finder in connection with the
transactions herein provided for.
SECTION 16. CONSTRUCTION.
(a) The descriptive headings of this Agreement are for
convenience only and shall not control or affect the meaning or construction of
any provision of this Agreement.
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(b) Any representation or warranty made to the knowledge of
any parties hereto, or as to what any such party is aware of, or statements of
similar purport, shall mean that such party has made a reasonable investigation
of the facts in connection therewith and is making such representation or
warranty based upon the results of such investigation.
(c) The terms "material" and "materially" when used with
respect to amounts of money or values shall refer to an amount or amounts of
$25,000 or more individually or in the aggregate.
SECTION 17. NOTICES. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient when
delivered personally or telecopied by confirmed facsimile, or three (3) days
after mailing by registered or certified mail, return receipt requested, or the
next day if sent by nationally recognized overnight courier with proof of
delivery, in each case postage prepaid, addressed as follows:
If to Purchaser:
Monetary Management Corporation
1436 Lancaster Avenue
Suite 210
Berwyn, Pennsylvania 19312
Attention: Donald F. Gayhardt, Vice President -
Corporate Development
Telecopy No. (215) 296-7844
with a copy to:
Klehr, Harrison, Harvey, Branzburg & Ellers
1401 Walnut Street
Philadelphia, Pennsylvania 19102
Attention: Brian J. Sisko, Esq.
Telecopy No. (215) 568-6603
If to Sellers:
Adrian Rubin
1874 Heritage Road
Huntingdon Valley, PA 19006
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<PAGE>
with a copy to:
Dermot F. Kennedy, Esquire
332 W. Broad Street
Quakertown, PA 18951
Telecopy No. (215) 538-6107
Any party may by notice change the address to which notice or other
communications to it are to be delivered or mailed.
SECTION 18. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania
without regard to conflicts of law.
SECTION 19. ASSIGNABILITY. This Agreement shall be binding upon the
parties and their respective successors and assigns; provided, however, that
this Agreement and the rights, privileges, duties and obligations of the Sellers
herein may not be assigned or delegated without the prior written consent of
Purchaser. Purchaser may assign its rights, privileges, duties and obligations
hereunder.
SECTION 20. WAIVERS AND AMENDMENTS. Any waiver of any term or
condition of this Agreement, or any amendment or supplement of this Agreement,
shall be effective only if in writing executed by the party against whom such
waiver, amendment or supplement is sought to be enforced. A waiver of any breach
or failure to enforce any of the terms or conditions of this Agreement shall not
in any way affect, limit or waive a party's rights hereunder at any time to
enforce strict compliance thereafter with every term or condition of this
Agreement.
SECTION 21. THIRD PARTY RIGHTS. Notwithstanding any other provision
of this Agreement, and except as expressly provided in Section 10 hereof, this
Agreement shall not create benefits on behalf of any third party, and this
Agreement shall be effective only as among the parties hereto, their successors
and permitted assigns.
SECTION 22. ILLEGALITIES. In the event that any provision contained
in this Agreement shall be determined to be invalid, illegal or unenforceable in
any respect for any reason, the validity, legality and enforceability of any
such provision in every other respect and the remaining provisions of this
Agreement shall not, at the election of the party for whose benefit the
provision exists, be in any way impaired.
SECTION 23. NO PRESUMPTION AGAINST THE DRAFTER. Each of the parties
to this Agreement participated in the drafting of this Agreement and the
interpretation of any ambiguity
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contained in this Agreement will not be affected by the claim that a particular
party drafted any provision hereof.
SECTION 24. COUNTERPARTS. This Agreement may be executed in multiple
counterparts all of which taken together shall constitute one and the same
instrument.
SECTION 25. ENTIRE AGREEMENT. This Agreement (including the
Schedules and the Exhibits delivered pursuant hereto) constitutes the entire
agreement between the parties and pertaining to the subject matter hereof and
supersedes all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether oral or written, of the parties.
SECTION 26. RISK OF LOSS. The risk of loss or damage to the Assets
caused by fire or otherwise, between the date of this Agreement and the Closing
hereof, shall be on Sellers. In the event of fire or the casualty loss to any
one particular Store or any of the purchased Assets prior to Closing, which at
the time of Closing, prevents the normal operation of that Store alone, and
which cannot be repaired or returned to operation within ninety (90) days from
the date of loss, the Purchaser shall have the option to adjust the Purchase
Price by an amount agreed upon by the parties hereto, or to proceed under this
Agreement and be entitled to claim and accept all insurance proceeds due to the
Sellers.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the date first above written.
MONETARY MANAGEMENT CORP.
By: /s/ Donald Gayhardt
----------------------
Donald Gayhardt, Executive Vice President
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HAPPY'S CHECK CASHING, A SOLE
PROPRIETORSHIP
By: /s/ Adrian Rubin
----------------------
Adrian Rubin, Sole Proprietor
CHASE MONEY LOAN, INC.
By: /s/ Adrian Rubin
----------------------
Adrian Rubin, President
ADRIAN RUBIN, AN INDIVIDUAL
/s/ Adrian Rubin
----------------------------
ALISON RUBIN, WIFE OF ADRIAN RUBIN
/s/ Alison Rubin
----------------------------
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SCHEDULES AND EXHIBITS
TO
ASSET PURCHASE AGREEMENT
JANUARY 9, 1995
<PAGE>
Schedule Number Brief Description
A List of all Rubin Stores
1.2(a) Licenses and Authorizations
1. Business Privilege License
2. Pawn-broking License
3. Pennsylvania Lottery License
4. Dealers in Precious Metals License
<PAGE>
1.2(b) Personal Property
<PAGE>
1.2(c) Real Property
Leasehold interest in each of Stores listed on Exhibit A.
<PAGE>
1.2(e) Intellectual Property, etc.
[None]
<PAGE>
3.1 Allocation of Purchase Price
Furniture, Fixtures and Equipment $ 300,000
Goodwill 2,400,000
----------
$2,700,000
<PAGE>
5.2(a) Required Consents, Approvals, Authorizations,
Waivers and Notices
Landlord's Consent to Assignment of Lease for each Store
being acquired.
<PAGE>
5.2(c)(iii) Acceleration of Debts and Obligations
[None]
<PAGE>
5.8(a) Compensation of Employees
<PAGE>
5.8(b) Employee Disputes; Termination of Employment
[None]
<PAGE>
5.9 Employee Benefit Plans, etc.
[None]
<PAGE>
5.11(a) Contracts
1. JM Security
2. Spectaguard Security
3. Land Security
4. Sheppard Security
5. Leases for each of the Stores *
<PAGE>
6.2 Consents required by Purchaser
- Final approval of Purchaser's bank(s)
- Licenses from various state and other authorities
<PAGE>
EXHIBIT A
Promissory Note
<PAGE>
Exhibit B
Intentionally Deleted
<PAGE>
Exhibit C
Non-Competition Agreement
Exhibit 10.1(b)
<PAGE>
AMENDMENT NO. 1 TO
ASSET PURCHASE AGREEMENT
This Amendment No. 1 to that certain Asset Purchase Agreement (the
"Agreement") dated as of January 9, 1995 by and between Monetary Management
Corp. ("Purchaser"), Happy's Check Cashing (the "Company"), Chase Money Loan,
Inc. ("CML") and Adrian Rubin ("Rubin") is dated as of the 20th day of February
1995.
WHEREAS, the parties hereto executed and delivered the Agreement in
connection with the acquisition of the Assets utilized in the operation of the
Stores (both as defined in the Agreement).
WHEREAS, the parties to the Agreement now wish to amend certain
terms and provisions of the Agreement.
NOW THEREFORE, intending to be legally bound hereby, the parties to
the Agreement hereby agree as follows: (All capitalized terms utilized but not
defined herein shall have the meaning ascribed thereto in the Agreement.)
1. Exhibit A to the Agreement (i.e. the Judgment Note) is amended
and revised to read in its entirety in the form attached hereto.
2. Notwithstanding anything to the contrary contained in Section
1.5, Section 2 and/or Section 14 of the Agreement, the parties hereby agree as
follows:
a. As to Store No. 7, Rubin and Purchaser shall enter into a
lease as described in Section 14 except that, in addition to the described
terms, for the initial one (1) year period of the lease, Purchaser shall have
the right to terminate the lease, without liability, upon thirty (30) days
written notice to Rubin.
b. As to Store No. 15, Rubin and Purchaser have prepared a
list of improvements, which is attached hereto and incorporated herein by
referenced, to be made to the subject property on or before May 22, 1995. If
such improvements/renovations are not made to Purchaser's reasonable
satisfaction by such date, Purchaser shall have the right to terminate such
lease.
c. In the event that, with regard to Store No. 7 and/or Store
No. 15, Purchaser exercises its termination option, Rubin shall not rent either
or both of such Stores to an entity or person intending to transact the business
of check cashing, money transfer, welfare distribution or pawn.
3. Notwithstanding anything to the contrary contained in the
Agreement, the parties agree that Purchaser shall not assume Seller's lease
regarding Store No. 29 and shall not acquire the Personal Property located at
that Store and used in the operation of that Store. Seller shall be free to sell
such Personal Property to a third party.
<PAGE>
4. If within a period of two (2) years from the date hereof,
Purchaser decides to sell and/or lease pagers at some or all of the Stores, it
will attempt in good faith to negotiate a mutually acceptable business
arrangement with Seller regarding such business. If such negotiations fail,
Purchaser shall be free to execute an agreement regarding such matters with a
third party.
5. Other than as set forth herein, the Agreement is ratified and
confirmed and remains in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment No. 1
intending to be legally bound hereby.
MONETARY MANAGEMENT CORP.
By: /s/ Donald Gayhardt
----------------------------------
Donald Gayhardt, Executive Vice President
HAPPY'S CHECK CASHING, A SOLE
PROPRIETORSHIP
By: /s/ Adrian Rubin
----------------------------------
Adrian Rubin, Sole Proprietor
CHASE MONEY LOAN, INC.
By: /s/ Adrian Rubin
----------------------------------
Adrian Rubin, President
ADRIAN RUBIN, AN INDIVIDUAL
/s/ Adrian Rubin
-------------------------------------
ALISON RUBIN, WIFE OF ADRIAN RUBIN
/s/ Alison Rubin
--------------------------------------
2
Exhibit 10.2
<PAGE>
PURCHASE AGREEMENT
BY AND BETWEEN
MONETARY MANAGEMENT CORPORATION
(SOMETIMES "MMC", SOMETIMES "PURCHASER")
AND
NCCI CORPORATION ("NCCI")
AND
LARRY M. SENDERHAUF ("LS")
AND
E. RICK SAFFORD ("RS")
AND
FRED T. KAMPO, JR. ("FK")
DATED
JULY 28, 1995
<PAGE>
PURCHASE AGREEMENT
------------------
THIS PURCHASE AGREEMENT is made as of this 28th day of July,
1995, by and among MONETARY MANAGEMENT CORPORATION, a New York
corporation (sometimes "MMC", sometimes "Purchaser"), and NCCI
CORPORATION, a Delaware corporation ("NCCI"), LARRY M. SENDERHAUF
("LS") and E. RICK SAFFORD ("RS") and FRED T. KAMPO, JR. ("FK").
LS, RS and FK are each sometimes referred to hereinafter as
"Shareholder" and sometimes collectively as "Shareholders". The
Shareholders and NCCI are sometimes hereinafter referred to as
"Sellers".
W I T N E S S E T H :
- - - - - - - - - - -
WHEREAS, LS is the beneficial, record owner of all of the issued
and outstanding capital stock (the "LMS Shares") of L.M.S. Development
Corporation, an Arizona corporation ("LMS");
WHEREAS, LS and RS are the beneficial, record owners of all of
the issued and outstanding capital stock (the "PRE Shares") of Pacific
Ring Enterprises, Inc., a California corporation ("PRE"), (the LMS
Shares and the PRE Shares are sometimes hereinafter referred to as the
"Shares");
WHEREAS, LS and FK are the beneficial, record owners of all of
the issued and outstanding capital stock of NCCI;
WHEREAS, LMS presently owns and operates eight (8) check cashing
stores located in the State of Arizona (the "LMS Stores");
WHEREAS, PRE presently owns and operates eight (8) check cashing
stores located in the State of California (the "PRE Stores");
WHEREAS, NCCI presently owns and operates three (3) check cashing
stores located in the states of Wisconsin and Ohio which are not
situated on American Indian Reservations (the "NCCI Stores") and one
(1) check cashing store located in Wisconsin which is situated on an
American Indian Reservation. The LMS Stores, the PRE Stores and the
NCCI Stores are sometimes hereinafter collectively referred to as the
"Stores";
<PAGE>
WHEREAS, LMS 33, Inc., an Arizona corporation ("LMS 33"), owned
by LS and RS, holds certain rights, title and interest in and to
certain intellectual property rights utilized or useable in the
operation of the Stores (the "LMS Intellectual Property");
WHEREAS, Purchaser desires to acquire all of the LMS Shares from
LS; all of the PRE Shares from LS and RS; the Assets (as hereinafter
defined) related to the NCCI Stores (the "NCCI Assets") from NCCI; and
the Intellectual Property. (LMS, PRE and NCCI are sometimes
hereinafter collectively referred to as the "Companies");
WHEREAS, Purchaser desires that, following the Closing Date, the
Shareholders and NCCI will not compete with Purchaser and its
affiliates under certain terms and in exchange for certain
consideration as set forth in separate Non-Competition Agreement(s) to
be entered into on the Closing Date between the Purchaser and each of
the Shareholders and NCCI (the "Non-Competition Agreements") as set
forth on Exhibits A-1 through A-4 hereto.
NOW, THEREFORE, in consideration of the covenants, warranties and
mutual agreements set forth herein and in reliance upon the
representations and warranties contained herein, the parties,
intending to be legally bound, do hereby agree as follows:
SECTION 1. PURCHASE AND SALE OF LMS AND PRE SHARES, AND NCCI
-------------------------------------------------
ASSETS.
------
1.1 PURCHASE OF LMS AND PRE SHARES, AND NCCI ASSETS. Subject to
-----------------------------------------------
and in reliance upon the representations, warranties and agreements
herein set forth, and subject to the terms and conditions herein
contained, the Sellers agree, on the Closing Date, to convey, sell,
assign, transfer and deliver the Shares and the NCCI Assets to the
Purchaser, or its nominee, and to perform all of their obligations
pursuant to this Agreement, and the Purchaser agrees to perform all of
its obligations pursuant to this Agreement and to purchase and accept,
or to cause its nominee to accept, the Shares and the NCCI Assets from
the Sellers. In addition, Shareholders and NCCI agree to provide
Purchaser with access to all documents and/or information as may be
reasonably necessary to enable Purchaser to see to the efficient and
proper conduct and administration of LMS, PRE and the NCCI Assets,
including the LMS Intellectual Property, from and after the Closing
Date, including, without limitation, all historical files, tax
returns, records and personnel data in connection with the Stores.
Provided, however that the Shareholders and NCCI will retain their
original financial books and records and other financial documents
required for preparation of tax returns but will provide copies of
such books and records to Purchaser, if reasonably needed for any of
the above purposes, at Purchaser's request.
1.2 ASSETS. It is understood that, on the Closing Date at the
------
time of Closing (as hereinafter defined) of the transactions
contemplated hereby, all of the properties, business,
-2-
<PAGE>
good will and assets at present used or useable in the operation of
the Stores, and/or the corporate offices of LMS and PRE, including the
LMS Intellectual Property, except for the Excluded Assets (as defined
below) (collectively the "Assets"), including, but not limited to, the
following, shall be owned by LMS, PRE and NCCI, free and clear of all
liens, charges, judgments, encumbrances, taxes, imports or levies,
except for the Permitted Encumbrances (as hereinafter defined):
(a) Licenses and Authorizations. All of the licenses,
---------------------------
permits and authorizations used or useable in the operation of the
Stores (to the extent legally transferable in the case of NCCI), and
the corporate offices of LMS and PRE, including, specifically, but not
limited to, the licenses, permits and authorizations listed on
Schedule 1.2(a) hereto, together with any renewals, extensions or
modifications thereof and additions thereto and other pending
applications or applications to be filed with any regulatory or
governmental body made in the ordinary course of business between the
date of this Agreement and the Closing Date (the "Licenses").
(b) Personal Property, etc. The tangible and intangible
-----------------------
personal property, equipment, machinery, furniture, fixtures, tools,
supplies and other assets, wherever located, used or useable in the
operation of the Stores, and the corporate offices of LMS and PRE,
including, specifically, but not limited to, the property listed on
Schedule 1.2(b) hereto, together with such additions, modifications
and replacements thereto, and subject to deletions therefrom in
connection with any such replacements or normal usage, as may be made
in the ordinary course of business between the date of this Agreement
and the Closing Date (the "Personal Property").
(c) Leased Real Property. The interest of the Companies in
--------------------
and to the leased real property, buildings and structures, leasehold
improvements, fixtures and appurtenances used or useable in the
operation of the Stores, and the corporate offices of LMS and PRE,
described in Schedule 1.2(c) hereto (the "Real Property") and their
interests and rights arising under all agreements, rights and
appurtenances relating thereto, including, specifically, subject to
the provisions of Section 14(b) hereof, the lease agreements listed on
Schedule 1.2(c) hereto (the "Leases"), any renewals, extensions,
amendments or modifications thereof, and any additional agreements and
leases made or entered into in the ordinary course of business between
the date of this Agreement and the Closing Date.
(d) Leases and Agreements. The rights of the Companies
---------------------
arising under the "Assumed Contracts", as defined in Section 5.11(a)
hereof, including specifically, the Leases and other agreements
specifically listed or referred to on Schedule 5.11(a) hereto and
indicated by asterisk, including any renewals, extensions, amendments
or modifications thereof.
-3-
<PAGE>
(e) Intellectual Property, etc. All copyrights,
---------------------------
trademarks, service marks, trade secret rights, computer programs and
software, permits, licenses or other similar rights used or useable in
the operation of the Stores, and the corporate offices of LMS and PRE,
including, specifically, the copyrights, trademarks, service marks,
trade secret rights, computer programs and software, permits, licenses
or other similar rights listed on Schedule 1.2(e) hereto, together
with any additions or modifications thereto and subject to any
deletions therefrom made in the ordinary course of business between
the date of this Agreement and the Closing Date (the "Intellectual
Property"). (It is understood and agreed by the parties hereto that,
just prior to Closing, the LMS Intellectual Property shall be
transferred to LMS and shall at Closing be considered part of the
"Intellectual Property" included in the Assets.)
(f) Except as provided above, all books, records and files
pertaining to the business conducted by the Stores (or otherwise by
LMS and/or PRE) for all periods ending on or before the Closing Date
(the "Books and Records"). Provided, however, that for periods
following Closing, Sellers may retain copies of such books and records
as they deem reasonably necessary for legal, accounting and tax
purposes. Any copies so maintained shall be treated as confidential
information of Purchaser and shall be treated by Shareholders and NCCI
in accordance with the standards established under Section 7.6
regarding Purchaser's handling of confidential information of the
Shareholders and NCCI.
(g) The Agreed Prepaid Expenses (as defined below) of the
Companies, relating to the NCCI Stores in the case of NCCI, existing
as of the Closing Date.
(h) Customer lists, vendor lists and other similar
intangible assets relating to or useable in the operation of the
Stores (the "Intangible Assets").
1.3 CASH AND CASH EQUIVALENTS; OTHER EXCLUDED ASSETS. It is
------------------------------------------------
understood that any (i) cash, bank accounts, accounts receivable,
refunds of unearned insurance premiums and any other refunds, bank
deposits and items in the process of collection; (ii) automobiles and
life insurance policies and security deposits; (iii) the Reservation
Operation Assets, as defined below; and (iv) that certain real
property known as 6900 Reading Road, Cincinnati, Ohio owned by NCCI,
held by the Companies shall not constitute part of the Assets (the
"Excluded Assets"). Prior to Closing, Shareholders shall cause any
such Excluded Assets then owned by LMS and/or PRE to be distributed
out to the Shareholders, as appropriate. Solely as an accommodation
to the Sellers, Purchaser will, or will cause LMS and PRE, to attempt
to collect the Companies' pre-Closing Store-related outstanding
accounts receivable, items in the process of collection, returned
checks and other returned documents and will remit to the Sellers, any
amounts so collected, less an amount equal to 10% of all amounts
collected against accounts receivable that are 30 days or older as of
the Closing Date,
-4-
<PAGE>
returned checks and other returned items, which amount shall be
retained by the Purchaser. Purchaser shall have no affirmative duty
to successfully collect or cause LMS or PRE to successfully collect
any of such items.
For purposes of this Agreement, the Reservation Operation Assets
shall specifically include:
1. Any assets of NCCI directly related to the NCCI
check-cashing store presently located on the Lac du Flambeau
Band of Lake Superior Chippewa Indians Reservation, of Lac
du Flambeau, Wisconsin and/or any and all other check
cashing stores or similar businesses now or hereafter
created on any Indian reservation and any and all
contractual rights with respect thereto, including, but not
limited to, any contracts or other agreements resulting from
negotiations currently in effect; and
2. The Wisconsin Gaming Commission Certificate issued
to NCCI on February 16, 1995, to operate as a Gaming-Related
Contractor, pursuant to Articles VII and VIII of the Tribal
Gaming Compacts between the State of Wisconsin and the
Native American Nations Conducting Class III Gaming within
the State of Wisconsin, from the date of issuance through
January 31, 1996, and any and all extensions, renewals,
substitutions or other forms thereof, along with any and all
other certificates to operate as a Gaming-Related Contractor
or the like on any Indian reservation.
1.4 LIENS. The Shareholders and NCCI agree that, as of Closing,
-----
the Assets will be free and clear of all liens, charges, encumbrances,
taxes, imports or levies except for the Permitted Encumbrances, and
specifically agree that all liens, charges, encumbrances or taxes,
other than the Permitted Encumbrances, shall be satisfied prior to or
upon consummation of the Closing.
1.5 ASSUMED CONTRACTS. Upon Closing, NCCI will assign, transfer
-----------------
and convey and deliver, and Purchaser will assume and agree to perform
and discharge, the obligations of NCCI under the Assumed Contracts to
which NCCI is a party and will defend, indemnify and hold Sellers
harmless with respect thereto, including, without limitation, court
costs and reasonable attorneys' fees. As to the Assumed Contracts to
which LMS and/or PRE are a party, Purchaser will, following Closing,
cause LMS and PRE, as applicable, to perform and discharge their
obligations thereunder. Any contracts, agreements, etc. of LMS and
PRE other than the Assumed Contracts shall not be the obligation of
LMS or PRE following Closing. The Sellers shall be responsible for
the satisfaction of any of LMS' or PRE's
-5-
<PAGE>
liabilities or obligations thereunder following Closing and the
Sellers will defend, indemnify and hold Purchaser harmless with
respect thereto, including, without limitation, court costs and
reasonable attorneys' fees.
SECTION 2. LIABILITIES.
-----------
2.1 LIABILITIES TO EXIST AS OF CLOSING. As of the Closing Date,
----------------------------------
at the time of Closing, Shareholders shall have caused LMS and PRE to
satisfy all of their obligations and liabilities other than (i)
liabilities or obligations (absolute, contingent or otherwise) arising
after the Closing Date in respect of the Assumed Contracts (the
"Contract Liabilities"); and (ii) other liabilities to the extent
Purchaser shall have received a credit therefor pursuant to the
apportionment provisions of Section 2.3 hereof) ("Credited
Liabilities"). The liabilities and obligations to be satisfied on or
prior to Closing shall include any amounts due or to become due for
services rendered, or goods delivered, to LMS or PRE on or prior to
Closing. The Contract Liabilities and the Credited Liabilities shall
be the responsibility of LMS or PRE, as the case may be, following
Closing. The liabilities referred to above shall be sometimes
hereinafter referred to as the "Permitted Liabilities".
Notwithstanding the foregoing, the Shareholders and NCCI shall not be
required to remove the Permitted Encumbrances. The Sellers shall be
responsible for any items in the process of collection as of Closing
which are returned on or after Closing. In that regard, for a period
of thirty (30) days following Closing, Sellers shall maintain an
account balance of at least $30,000 and $40,000 in the existing bank
accounts of each of LMS and PRE (which accounts shall be retained by
Sellers post-Closing pursuant to Section 1.3 hereof) for purposes of
satisfying such returned items.
2.2 OTHER LIABILITIES. Without limiting the generality of
-----------------
Section 2.1 hereof, and regardless of whether any of the following may
be disclosed to Purchaser pursuant to Section 5 hereof or otherwise,
or whether Purchaser may have knowledge of the same: (a) as of the
Closing, neither LMS nor PRE shall be liable or obligated for and the
Purchaser shall not assume, and shall not be deemed to have assumed,
any other obligation or liability other than the Contract Liabilities
and the Credited Liabilities and the Assets shall not be subjected to
any lien, charge or encumbrance other than the Permitted Encumbrances;
(b) the Shareholders and/or NCCI, as applicable, will be liable for
and will pay and indemnify Purchaser in respect of any taxes or other
governmental charges or assessments of whatever kind or nature imposed
upon the Purchaser or LMS or PRE (including, without limitation, any
income, franchise or any other similar taxes based on or measured by
income or otherwise, any sales or use taxes, or any property, excise
or other taxes together with any interest or penalties relating
thereto) arising out of the operation of the Stores or otherwise or
the ownership of the Assets for periods or events prior to the Closing
Date; and (c) the
-6-
<PAGE>
Shareholders and/or NCCI, as applicable, shall, at Closing, become
responsible for and shall pay, perform, satisfy or obtain a discharge
or release from, as of Closing, or as soon as practicable thereafter,
any obligation, payment, liability or expense imposed on LMS, PRE or
the Purchaser other than the Contract Liabilities and the Credited
Liabilities or any other matters which are specifically to remain or
become the responsibility of or obligation of LMS, PRE or Purchaser
hereunder such as the Permitted Encumbrances.
2.3 APPORTIONMENTS; REIMBURSEMENT. Rents, additional rents,
-----------------------------
real estate taxes, personal property taxes, water, utilities, wages
and other employee benefits (including accrued vacation, sick pay and
personal days) and other expenses arising from or by virtue of LMS's
PRE's or NCCI's obligations under the Assumed Contracts (the
"Expenses") and the Agreed Prepaid Expenses (as defined below) paid
by, or on behalf of, LMS, PRE or NCCI prior to the Closing Date and
allocable, in whole or in part, to any period following the Closing
Date, shall be credited to the Sellers to the extent so allocable, or
if unpaid by, or on behalf of, LMS, PRE or NCCI prior to the Closing
Date and allocable, in whole or in part, to any period prior to the
Closing Date, shall be credited to Purchaser. In addition, to the
extent that, in connection with the assignment of the Leases, security
deposits paid thereunder by any of the Companies are to remain in
place on and after Closing, Purchaser shall reimburse the
Shareholders/NCCI for such amounts at Closing. Schedule 2.3 hereto
lists the categories of prepaid expenses of the Companies, relating to
the NCCI Assets in the case of NCCI, expected to exist as of Closing.
Those categories of prepaid expenses indicated with an asterisk shall
be considered the "Agreed Prepaid Expenses" which shall be prorated as
described above as of Closing.
The parties hereto shall make apportionments on the Closing Date
and corresponding adjustments to the Purchase Price (as defined below)
to the extent possible at that time. However, because a number of the
Expenses will not be readily determinable until after the Closing
Date, final apportionments cannot be made on that date. Therefore, at
such time as the Sellers and Purchaser reasonably believe that all of
the Expenses are sufficiently determinable so that charges and credits
may be finally allocated in the manner contemplated by this Section
2.3, but in no event later than 120 days following the Closing Date
(other than in the case of Lease-related matters as to which
adjustments shall be made as necessary as dictated by the terms of
each particular Lease), the Sellers and Purchaser shall agree with
respect to the allocation of the Expenses and a further adjustment
shall be made between the parties hereto. To the extent the net
effect of such additional adjustment results in a credit to the
Sellers, Purchaser shall promptly pay such additional amount to the
Sellers. To the extent such net effect results in a credit to
Purchaser, the Sellers shall promptly repay such amount to Purchaser.
In the event that either party gives the other written notice that a
dispute exists with respect to the apportionment of Expenses and such
dispute is not resolved within 20 days after the other party receives
a copy of such notice of dispute, either party
-7-
<PAGE>
may submit such dispute to arbitration in the City of Philadelphia for
final resolution by a panel of three arbitrators, one to be chosen by
the Sellers and one to be chosen by the Purchaser and the third to be
chosen by the two so elected, in accordance with the commercial
arbitration rules of the American Arbitration Association then in
effect. The determination of such arbitrators shall be final and
binding upon the parties hereto, and the fees of such arbitrators in
connection with the determination shall be paid by the party against
whom the award was made, or if a compromise was made, shared equally.
SECTION 3. CONSIDERATION FOR TRANSFER OF SHARES AND NCCI
---------------------------------------------
ASSETS; NON- COMPETITION AGREEMENTS.
-----------------------------------
(a) Subject to the provisions of Section 14 hereof,
Purchaser shall acquire the Shares and the NCCI Assets, for an
aggregate purchase price (the "Purchase Price") of Six Million Seven
Hundred Fifty Thousand ($6,750,000) Dollars, as adjusted pursuant to
Sections 2.1 and 2.3 above. The Purchase Price, as adjusted pursuant
to Sections 2.1 and 2.3 above, shall be paid in full on the Closing
Date, in cash or by wire transfer of immediately available federal
funds to such account(s) as the Sellers may designate.
Notwithstanding the foregoing, if the Internal Revenue
Code ("IRC") shall be amended effective prior to Closing, in such a
fashion that the capital gain of Sellers pursuant to the transactions
contemplated hereby shall be taxed at an effective rate which is equal
to twenty (20%) percent or less, the Purchase Price shall be
automatically reduced to $6,000,000, or less, subject to the
provisions of Section 14 hereof, and the allocation set forth in
Schedule 3 shall be adjusted accordingly.
(b) In consideration of the execution by the Shareholders
and NCCI of the Non-Competition Agreements, Purchaser shall pay to
them aggregate consideration as set forth in the forms of Non-
Competition Agreement attached hereto as Exhibits A-1 through A-4.
(c) Purchaser and the Shareholders and NCCI hereby
represent, warrant and agree that the allocation set forth in Schedule
3 hereto and the amount of the consideration for the Non-Competition
Agreements were determined through arms' length negotiation between
the parties hereto; and that all parties hereto will report the
transactions consummated pursuant to this Agreement, for tax purposes,
in accordance with such schedule.
SECTION 4. CLOSING. Subject to the provisions of Section 13
-------
hereof, the closing of the consummation of the purchase and sale of
the Shares and the NCCI Assets contemplated
-8-
<PAGE>
by this Agreement (the "Closing") shall take place on or about
September 11, 1995 in Phoenix, Arizona (the "Closing Date"). The
Closing shall be deemed to take place as of the close of business on
the day of the Closing.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
--------------------------------------------------
AND NCCI. The Shareholders and NCCI hereby represent, warrant and
--------
covenant to Purchaser as follows:
Notwithstanding anything contained herein to the contrary,
Purchaser acknowledges that, prior to Closing (simultaneous with
Closing with regards to Cash and Cash Equivalents), Shareholders will
cause LMS and/or PRE to distribute out to them certain or all of the
Excluded Assets now owned by such entities. Such actions shall not be
deemed to be violative of the representations and warranties contained
below to the extent that any such actions are taken with reasonable
care and prudence via-a-vis the ongoing operations of the Stores and
the Business, and otherwise in accordance herewith.
5.1 ORGANIZATION AND GOOD STANDING; ACTIVITIES; CAPITAL STOCK.
---------------------------------------------------------
(a) Each of the Companies is a corporation duly organized,
validly existing and in good standing under the laws of their
respective states of incorporation. Each of the Companies is, and has
been since its respective date of inception, engaged solely in the
business of owning and operating check cashing outlets, and is duly
qualified or licensed to do business as a foreign corporation, and is
in good standing as a foreign entity, in every jurisdiction in which
the ownership of its property or assets or the conduct of its business
requires such qualification or license, other than where the failure
to so qualify would not, in the aggregate, have a material adverse
effect.
(b) To the best of the knowledge of the Shareholders and
NCCI after due inquiry, each of the Companies has the power and
authority (corporate and otherwise) to own, lease or operate its
properties and to carry on its business as now conducted, and the
Licenses represent all of the material governmental or regulatory
approvals, permits and licenses necessary for the operation of the
business of the Stores as presently conducted.
(c) As of the date hereof, the LMS Shares are owned of
record and beneficially by LS; and the PRE Shares are owned of record
and beneficially by LS and RS. The Shares constitute all of the
issued and outstanding capital stock of LMS and PRE. All of the
issued and outstanding Shares are fully-paid and non-assessable and
have been duly authorized and issued. The Shares are free and clear
of any charge, lien, option or encumbrance.
-9-
<PAGE>
5.2 CONSENTS, AUTHORIZATIONS AND BINDING EFFECT.
-------------------------------------------
(a) The Shareholders and NCCI have full power and authority
to execute and deliver this Agreement and the other agreements and
instruments to be executed and delivered by them pursuant hereto, and
to consummate the transactions contemplated hereby and thereby. On or
prior to the Closing Date, all acts and other proceedings required to
be taken by or on the part of the Shareholders and NCCI to carry out
this Agreement and such other agreements and instruments and the
transactions contemplated hereby and thereby will have been duly and
properly taken. This Agreement has been duly executed and delivered
by the Shareholders and NCCI and constitutes, and such other
agreements and instruments, when duly executed and delivered by the
Shareholders and/or NCCI, will constitute, legal, valid and binding
obligations enforceable in accordance with their respective terms
(subject, as to the enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws and
equitable principles affecting the enforcement of creditors' rights
generally from time-to-time in effect). The execution and delivery by
the Shareholders and NCCI of this Agreement and such other agreements
and instruments and the consummation of the transactions contemplated
hereby and thereby will not violate any law or conflict with or result
in any breach of or constitute a material default (or an event which
with notice or lapse of time or both would become a material default)
under, or result in the creation of a lien or encumbrance on any of
the Shares or the Assets pursuant to, any indenture, mortgage, lease,
agreement or other instrument to which the Shareholders or any of the
Companies is a party or by which they, it or any of the Shares or the
Assets may be bound or affected provided that the consents and
approvals disclosed on Schedule 5.2(a) have been obtained. Except as
specifically disclosed on Schedule 5.2(a) hereto, no approval,
authorization, consent or other order or action of or filing by the
Shareholders or the Companies with (i) any court, administrative
agency, or other governmental authority or (ii) party to one of the
Assumed Contracts is required for the execution and delivery by the
Shareholders or NCCI of this Agreement or such other agreements and
instruments or its consummation of the transactions contemplated
hereby or thereby.
(b) Except as provided in Schedule 5.2(a), the Shareholders
and NCCI may execute, deliver and perform this Agreement, the Non-
Competition Agreements and all other agreements to be executed in
connection herewith without the necessity of obtaining any consent,
approval, authorization or waiver or giving any notice or otherwise.
This Agreement constitutes and, when executed and delivered, the Non-
Competition Agreements will constitute the legal, valid and binding
obligations of the Shareholders and NCCI enforceable in accordance
with their respective terms.
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<PAGE>
(c) The execution, delivery and performance of this
Agreement and the Non-Competition Agreements, assuming that the
consents, approvals, authorizations, waivers and notices set forth on
Schedule 5.2(a) hereto are obtained or given, will not:
(i) to the best of the knowledge of NCCI and the
Shareholders after due inquiry, conflict with, result in a material
breach of, constitute a default, with or without notice and/or lapse
of time, under, result in being declared void or voidable any
provision of, or result in any right to terminate or cancel any of the
Assumed Contracts or any contract, agreement, license or commitment to
which any of the Companies or any of their respective properties is
bound and which is material to the operations thereof;
(ii) constitute a material violation of any statute,
judgment, order, decree or regulation or rule of any court,
governmental authority or arbitrator applicable or relating to the
Assets or the business of the Companies; or
(iii) result in (A) the acceleration of any
material debt or other obligation of any of the Companies, except for
debts and obligations identified in Schedule 5.2(c)(iii) hereto which
will be satisfied prior to or at Closing; (B) the creation of any Lien
(as defined in Section 5.4) upon any of the Shares or Assets; or (C)
the termination or cancellation or right to terminate or cancel any
obligation owed to any of the Companies.
5.3 FINANCIAL STATEMENTS AND FINANCIAL CONDITION.
--------------------------------------------
(a) The books of account of each of the Companies have been
maintained substantially in accordance with applicable laws, rules and
regulations and with sound accounting principles consistently applied,
and such books and records are and, during the periods covered by the
Financial Statements (as hereinafter defined), were correct and
complete in all material respects, and in all material respects
completely and accurately reflect the transactions of each of the
Companies and the income, expenses, assets and liabilities of each of
the Companies, including the nature thereof and the transactions
giving rise thereto.
(b) Annexed as Schedule 5.3(b) hereto are the financial
statements of each of the Companies for the twelve month period ended
December 31, 1994 and the five month interim period ended May 31, 1995
(collectively, the "Financial Statements" and the balance sheets
included therein, the "Balance Sheets").
(c) The Financial Statements have been prepared in
accordance with the books of account of each of the Companies in
conformity with sound accounting principles consistently applied, and
present fairly the financial position of each of the Companies as of
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the dates of the Financial Statements and the results of operations of
each of the Companies for the periods covered thereby.
(d) The Companies do not have any liabilities (absolute,
contingent or otherwise), which, in accordance with sound accounting
principles consistently applied, are required to be reflected,
reserved or otherwise disclosed in their respective Balance Sheets
which are not reflected, reserved or otherwise disclosed in such
Balance Sheets except (i) those incurred since the date of such
Balance Sheets in the ordinary course of business, consistent with
past practice, in arms' length transactions with unrelated parties,
and which do not have and cannot reasonably be expected to have, in
the aggregate, a material adverse effect on the business, operations,
financial condition or prospects of each of the Companies or their
respective business employing the Assets; and (ii) those specifically
described on Schedule 5.3(d) hereto.
5.4 TITLE AND CONDITION OF ASSETS.
-----------------------------
(a) Schedule 1.2(b) includes a complete list of all
Personal Property located at the Stores or used in the operation of
the Stores. Each of the Companies own good and marketable title to
the Assets indicated as being owned by that Company, including the
Personal Property, free and clear of liens, encumbrances, claims of
third parties, security interests, mortgages, pledges, agreements,
options and rights of others of any kind whatsoever, whether or not
filed, recorded or perfected, and including, without limitation, any
conditional sale or title retention agreement or lease in the nature
thereof or any financing statements filed in any jurisdiction or any
agreement to give any such financing statements (hereinafter
collectively referred to as "Liens"), other than rights of third
parties under leases of tangible personal property disclosed on
Schedule 5.11 hereto and liens for taxes not yet due and payable
(herein collectively referred to as the "Permitted Encumbrances").
(b) Other than for the 6900 Reading Road, Cincinnati, Ohio
property owned by NCCI, the Companies do not hold title to any real
property.
(c) The Assets constitute all assets that are material in
or to the operation of the business of the Companies and all of the
Stores. The Assets owned or leased are adequate to carry on the
business of the Companies and all of the Stores as it is now being
conducted and, except as set forth on Schedule 5.2(a) hereto, no
consent of any third party is required in order to transfer control of
any of the Assets to the Purchaser (including rights under the Assumed
Contracts) based upon the change in control of the Assets contemplated
hereby. The Personal Property constituting part of the Assets is in
adequate operating condition for continued operation of all of the
Stores as presently conducted.
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5.5 INTELLECTUAL PROPERTY RIGHTS. Schedule 1.2(e) sets forth a
----------------------------
correct and complete list containing a description of all trademarks,
trade names, service marks, copyrights or applications therefor or
other intellectual property (i) owned (or to be owned as of Closing)
by or registered (or to be registered as of Closing) in the name of
any of the Companies, or in which any of the Companies has any rights
as licensee or otherwise and which are presently or were within the
last two (2) years used in the operation of the Companies' business.
Except pursuant to the arrangements described in Schedule 1.2(e), no
interest in any of such trademarks, trade names, service marks,
copyrights or applications therefor has been assigned, transferred or
licensed to any third party and the Companies and/or the Shareholders
have not given or received notice of any claim by or against any of
the Companies as to any foreign or domestic trademarks, trade names,
copyrights or applications therefor of any of the Companies or any
third party. As to the name "Chex Cashed" (and all derivations
thereof) the Companies and/or the Shareholders have never received any
notice or claim, and have no reason to believe that any such notice or
claim is pending, indicating that the use of such name(s) by any or
all of the Companies infringes on any one else's rights in such
name(s).
5.6 LITIGATION AND COMPLIANCE.
-------------------------
(a) There are no filed, and Shareholders and NCCI have no
other actual knowledge of any, actions, suits, claims or proceedings,
whether in equity or at law, or governmental or administrative
investigations pending or, to the best knowledge of the Shareholders
and NCCI, threatened, nor, to the best knowledge of the Shareholders
and NCCI, is there any reasonable basis for any such action, suit,
claim or proceeding (i) by, against or otherwise involving any of the
Companies or the Stores or the Assets which, if adversely determined
would have a material adverse affect on the financial condition or
results of operation of any of the Companies, any of the Assets or any
asset or property of others leased or used in connection with the
business of the Companies pursuant to any agreement to which any of
the Companies is a party or (ii) which questions or challenges the
validity of this Agreement or any action taken or to be taken pursuant
to this Agreement.
(b) To the best of the knowledge of the Shareholders and
NCCI after due inquiry, the operations of each of the Companies are
and at all times have been in substantial compliance with, are not
currently in material default or violation in any material respect
under, and none of the Companies has been charged with nor have any of
the Companies and/or the Shareholders received any notice at any time
of any violation of, any statute, law, ordinance, regulation, decree
or order applicable to the business or operations of the Companies.
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<PAGE>
(c) The Companies, the Shares, the Assets, and the
transactions contemplated under this Agreement, are not subject to any
judgment, order or decree entered in any lawsuit or proceeding
applicable to the Shares, the Assets, the Stores or the business and
operations of the Companies.
(d) To the best of the knowledge of the Shareholders and
NCCI after due inquiry, the Companies have each duly filed or caused
to be filed all material reports and returns required to be filed by
the Companies with all governmental authorities (including, without
limitation, any currency reporting requirements) and have obtained all
material governmental permits and licenses and other governmental
consents (a complete list of which permits, licenses and consents is
set forth on Schedules 1.2(a) and 5.2(a) hereto) which are required in
connection with the business and operations of the Companies and the
Stores. To the best of the Shareholders' and NCCI's knowledge, no
proceedings for the suspension or cancellation of any of such permits,
licenses or consents is pending or threatened.
5.7 TAXES.
-----
(a) The Companies have each duly filed all material tax
reports and returns required in connection therewith to be filed in
respect of the business and operations of the Companies, the Stores
and the Assets. All such tax reports and returns are complete,
accurate and in compliance with all relevant laws and regulations in
all material respects, and, except as set forth on Schedule 5.7(a)
hereto, none has been audited by any governmental authority. Each of
the Companies has paid and discharged all federal, state, local and
foreign taxes, interest, penalties or other payments required, as the
case may be, to be paid whether or not shown on such tax reports in
respect of the Assets and the business, operations and employees of
the Companies and the Stores as of such date.
(b) None of the Companies have received notice of any tax
deficiency outstanding, proposed or assessed against any of the
Companies, nor do the Shareholders or NCCI have any knowledge of any
basis for any tax deficiency or assessment, nor have the Companies or
the Shareholders executed any waiver of any statute of limitations on
the assessment or collection of any tax. To the best knowledge of the
Shareholders or NCCI, there are no tax liens upon, pending against or
threatened against any of the Assets.
(c) None of the Companies has (i) agreed to or is required
to make any adjustment pursuant to Section 481(a) of the Internal
Revenue Code of 1986, as amended (the "Code") by reason of a change in
accounting method initiated by it, (ii) any knowledge that the
Internal Revenue Service has proposed any such adjustment or change in
accounting method, or (iii) no application pending with any taxing
authority requesting permission for any change in accounting methods
that relates to its business and operations;
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<PAGE>
(d) No Shareholder is a foreign person within the meaning
of Section 1445 of the Code;
(e) None of the Companies is a party to, bound by, or
obligated under any tax sharing, indemnification or similar agreement
or arrangement; and
(f) None of the Companies has been included, or required to
be included in, a consolidated or combined tax return with any other
person.
5.8 EMPLOYEES AND CONTRACTORS.
-------------------------
(a) Schedule 5.8(a) hereto contains a list of all persons
(including leased employees) who received compensation in respect of
the operations of the Companies (including compensation in the form of
commissions and independent contractors' fees) in excess of $25,000
during the last fiscal year (or in the interim period since the end of
such fiscal year) or who are currently receiving compensation
(including compensation in the form of commissions and independent
contractors' fees) at a rate in excess of $25,000 per annum and a
description of all compensation arrangements (including without
limitation, salaries and bonus compensation) affecting them.
(b) Except as disclosed on Schedule 5.8(b), none of the
Companies or the Shareholders has received any material complaint
from, and none of the Companies or the Shareholders has engaged in any
material dispute with, any of its employees (leased or otherwise),
independent sales people or contractors during the twelve (12) months
prior to the date hereof. Except as disclosed in Schedule 5.8(b), the
Shareholders are not aware of any employee or independent sales person
or contractor, other than the Shareholders, who plans to terminate
employment or association with the Companies whether currently or as a
result of the transactions contemplated hereby.
5.9 ERISA.
-----
(a) Included on Schedule 5.9 is a list of each (a) employee
benefit plan (within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")), (b)
employment agreement which may not be terminated by the Companies,
without penalty or liability (other than accrued liabilities as
disclosed in the Financial Statements) on notice of thirty (30) days
or less, (c) management or consulting agreement, (d) severance pay
plan, (e) employee relations policy, (f) practice or arrangement, (g)
agreements with respect to leased or temporary employees, (h) vacation
plan or arrangement, (i) sick plan, (j) stock purchase plan or stock
option plan, (k) fringe benefit plan or bonus plan and (l) any
deferred compensation agreement, plan or program
-15-
<PAGE>
presently covering any present or former employee of the Companies and
which is, or at any time within the past three (3) years was,
sponsored or maintained by (or to which contributions are, were, or at
any time within the past three (3) years were required to have been,
made by) the Companies or any other organization which is or was a
member of a controlled group or organization (within the meaning of
Sections 414(b), (c), (m) or (o) of the Internal Revenue Code, as
amended (the "Code"), of which any of the Companies is a member (the
"Controlled Group") or any other organization that maintains such
plan, program or agreement with respect to leased employees. Each and
every such plan, program and agreement included on the list set forth
under Schedule 5.9 is hereinafter referred to as an "Employee Benefit
Plan." Each such Employee Benefit Plan which is an employee pension
benefit plan (as such term is defined under ERISA Section 3(2))
intended to qualify under the Code so qualifies and has received a
favorable determination letter as to its qualification. With respect
to any employee benefit plan (within the meaning of Section 3(3) of
ERISA) and each other employee-related plan, policy, program,
practice, agreement or arrangement sponsored or maintained at any time
by the Companies or any member of any Controlled Group (whether or not
any of such plans are included on Schedule 5.9 hereof or are currently
in effect), as of the Closing Date, to the best of Sellers' knowledge,
the Companies are not subject to any existing or potential costs,
fines, penalties, expenses, taxes or other liabilities arising under,
or with respect to: (i) any failure by such plan, or by any individual
or entity, to comply, in all material respects, with all provisions of
ERISA; (ii) any material actions, suits or claims (other than routine
claims for benefits in the ordinary course); (iii) any provisions of
the Code; (iv) any failure of any individual or entity to make all
contributions in a timely manner as required by law (whether or not
waived under Code Section 412 or Part 3 of Title I of ERISA) or
otherwise or to pay all insurance and annuity premiums when due; (v)
any failure by any individual or entity to satisfy the provisions of
Section 4980B of the Code, Part 6 of Title I of ERISA or any other
federal or state law requiring the provision or continuance of health
or medical benefits; (vi) any Reportable Event (as such term is
defined under Title IV of ERISA); (vii) the failure of any such plan
to contain assets the value of which equal or exceed the value of all
liabilities thereunder pursuant to reorganized actuarial tables,
factors and assumptions; and (viii) any multiemployer plan within the
meaning of Sections 3(37) or 4001(a)(3) of ERISA.
5.10 LABOR RELATIONS.
---------------
(a) No employees (including leased employees) of the
Companies are covered by any collective bargaining agreement.
(b) To the best of the knowledge of the Shareholders and
NCCI after due inquiry, the Companies have complied, and are currently
in compliance, in all material respects with applicable laws
(including, without limitation, ERISA rules and regulations
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<PAGE>
relating to the employment of labor, including, without limitation,
those relating to wages, hours, unfair labor practices, discrimination
and payment of social security and similar taxes with respect to their
respective employees.
(c) To the best of the knowledge of the Shareholders after
due inquiry, the Companies have not engaged in nor are currently
engaging in, any unfair labor practice. To the best of the
Shareholders' and NCCI's knowledge, no complaint against the Companies
is currently pending or, to the best knowledge of the Shareholders and
NCCI, threatened before the National Labor Relations Board or any
state or local labor agency by or on behalf of any employee of the
Companies. No representation questions, arbitration proceedings,
labor strikes, slow-downs or stoppages, material grievances or other
labor troubles are currently pending or, to the best knowledge of the
Shareholders, threatened with respect to any of the Companies'
employees.
5.11 CONTRACTS.
---------
(a) All material contracts, leases, agreements, licenses,
commitments and purchase orders to which any of the Companies is a
party or by which any of the Companies or any of the Assets is bound
and which fall within the categories set forth below are listed on
Schedule 5.11(a) hereto. Also indicated on Schedule 5.11(a) is
whether such contract, etc. is with a related party or affiliate of
any of the Companies or any of the Shareholders, including any
officer, director or shareholder of any of the Companies or any
immediate family member thereof. The contracts, leases, agreements,
licenses, etc. required to be disclosed on Schedule 5.11(a) shall
include, but not be limited to, those falling in one or more of the
following categories:
(i) contracts or agreements with respect to which,
individually, the amount reasonably expected to be received or paid by
any of the Companies in the future exceeds $10,000 annually in the
aggregate;
(ii) joint venture contracts or arrangements or other
agreements involving a sharing of profits or expenses;
(iii) confidentiality, non-competition or non-
disclosure agreements;
(iv) contracts or agreements restricting the ability of
any of the Companies to sell or transfer any of their respective
assets; and
(v) contracts or arrangements involving any
restriction with respect to the geographical area of operations or
scope or type of business of any of the Companies.
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For purposes of this Agreement, only those contracts
indicated with an asterisk on Schedule 5.11(a) shall be deemed to be
"Assumed Contracts."
(b) Other than for the "Baseline Road" Lease referred to in
Section 14, to the knowledge of the Shareholders and NCCI, all of the
Assumed Contracts are valid and in full force and effect and
constitute the legal, valid and binding obligations of the Company
which is a party thereto and the other parties thereto. There are no
existing material defaults by the Company which is a party thereto or,
to the knowledge of the Shareholders and NCCI, by any other party
thereto and, to the knowledge of the Shareholders and NCCI, no event,
act or omission has occurred which (with or without notice, lapse of
time and/or the happening or occurrence of any other event) would
result in a material default thereunder. No other party to any of
such Assumed Contracts has in writing asserted to the Shareholders or
the Companies the right, and to the current actual knowledge of the
Shareholders and NCCI, no basis exists for the assertion of any
enforceable right, to renegotiate, or cancel or terminate prior to the
full term thereof, any of the terms or conditions of any of such
Assumed Contracts nor do the Shareholders or NCCI have knowledge that
any party to any of such Assumed Contracts intends to refuse to renew
such Assumed Contract upon termination of its current term.
(c) Except as disclosed in Schedule 5.2(a), no consent of
any party to any of the Assumed Contracts is required for the
execution, delivery or performance of this Agreement or the
consummation of the transactions contemplated hereby, including, but
not limited to, the change in control of the Companies or the Assets
under the Leases for the Stores.
(d) The Shareholders and NCCI have heretofore delivered to
Purchaser true, correct and complete copies of all of the Assumed
Contracts, as amended or supplemented, as well as summaries of the
current rents, additional rents and other payments due pursuant to the
terms thereof.
5.12 ABSENCE OF CERTAIN CHANGES, ETC. Except as set forth on
--------------------------------
Schedule 5.12, since the date of the Financial Statements, there has
been no material adverse change in the Assets (including the fair
market value thereof), business, operations, financial condition or
prospects of the Companies or in the condition of any of the Assets,
or the assets or properties of others leased or used by the Companies,
and to the best knowledge of the Shareholders and NCCI, there are no
events with respect to any of the foregoing that threaten to disrupt,
prevent or impair in a materially adverse manner the conduct of the
Companies' business going forward.
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<PAGE>
Except as set forth on Schedule 5.12, since the date of the
Financial Statements, each of the Companies has not:
(a) experienced any material damage, destruction or loss to
or of any of its material assets, whether or not covered by insurance;
(b) material increased or agreed to make any material
increase in the compensation payable to any employee(s), including
leased employees, or independent contractor(s), other than in the
ordinary course of business;
(c) conducted its operations or participated in any
transaction otherwise than in the ordinary course of business;
(d) entered into any transaction or contract, or amended or
terminated any transaction or contract which transaction or contract,
or amendment or termination thereof, to the knowledge of the
Shareholders or NCCI might reasonably be expected to have a material
adverse effect on the financial condition, business or operations of
the Companies;
(e) cancelled or waived any claim or right of substantial
value or sold, transferred, distributed or otherwise disposed of any
of their assets, except for a fair consideration in the ordinary
course of business;
(f) other than as specifically referred to herein,
distributed any of its property or assets to the Shareholders;
(g) incurred any obligation or liability (absolute or
contingent) in all cases exceeding $10,000 in the aggregate;
(h) except in the case of NCCI, discharged or satisfied any
lien or encumbrance or paid any obligation or liability (absolute or
contingent) other than liabilities disclosed in the Schedules hereto
or current liabilities incurred since the date of the Financial
Statements in the ordinary course of business;
(i) mortgaged, pledged or subjected to any Lien (as defined
in Section 5.4) or charge or any other encumbrance, any assets,
tangible or intangible, other than the lien of current state or local
property taxes not yet due;
(j) received notice or had knowledge of any labor trouble
or union organizing activity other than routine matters, none of which
is material,
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<PAGE>
(k) knowingly waived any rights of substantial value,
whether or not in the ordinary course of business;
(l) failed to pay all debts (including all trade accounts
payable) and obligations promptly as they became due, or in advance or
otherwise to the extent consistent with prior practice, delayed the
payment of any debt or obligation after such date except in the case
of a bona fide dispute over the amount thereof; or
(m) entered into any agreement, commitment, letter of
intent or other contract providing for any of the foregoing actions.
5.13 COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as disclosed on
----------------------------------
Schedule 5.13, each of the Companies has not used, treated, stored or
disposed of hazardous waste or toxic substances on any property owned
or leased by any of the Companies (whether owned, leased, subleased or
used by any of the Companies, the "Property") in violation of any
federal, state or local environmental protection, toxic substance,
human health or similar statute, regulation or ordinance
(collectively, the "Environmental Laws"), and, to the best of the
Shareholders' and NCCI's knowledge, there have been no spills or
releases of hazardous substances on or from any Property that, in any
such case, could subject the owner or occupier of the Property to
liability. The Property and all operations conducted on such Property
during the period of the Companies' ownership, use or occupancy have
been in compliance with all Environmental Laws. The foregoing
sentence shall not be deemed to be a representation regarding any non-
obvious circumstance on any Property created by any non-affiliated
third party (without the knowledge of the Sellers) prior to the
Companies', NCCI's or the Shareholders' use or occupancy of any such
Property, if such circumstance in fact constituted non-compliance with
any Environmental Law during the period of the Companies' ownership,
use or occupancy of such Property. The Companies have not received
any notice, nor are aware, of any administrative or judicial
investigations, proceedings or actions with respect to violations,
alleged or proven, of any Environmental Law by any of the Companies or
lessee or any lessor of any of the Companies, if any, or otherwise
involving the Property or the operations conducted on the Property.
To the best of knowledge of Sellers, no asbestos containing material
is present in any of the improvements on any Property or is otherwise
located on any Property. To the best of the knowledge of the
Shareholders and NCCI after due inquiry, all operations conducted on
the Property are in compliance with all federal and state statutes and
regulations relating to asbestos. Except as disclosed on Schedule
5.13, to the best of the knowledge of the Shareholders and NCCI after
due inquiry, no underground storage tanks, whether in use or closed,
are on or under any Property.
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<PAGE>
5.14 NO TAKING. None of the Companies has received notice of any
---------
pending, threatened, proposed or contemplated eminent domain or
condemnation proceeding or similar taking, with or without payment of
compensation therefor, or any pending or threatened rezoning affecting
the real property which is the subject of the Leases included among
the Assumed Contracts or the New Lease (as hereinafter defined).
5.15 GOVERNMENTAL ACTIONS. The Shareholders and NCCI are not
--------------------
aware of any statutory or regulatory effort currently pending in the
legislative or regulatory branches of the governments of the States of
Arizona, Ohio or Wisconsin seeking to limit or otherwise restrict the
amount, timing or method of collection of fees in connection with the
services provided by the Stores.
5.16 ADA MATTERS. Neither the Companies nor the Shareholders
-----------
have received any notification, nor are aware of any circumstance,
regarding any of the real property which is the subject of the Leases
or the New Lease which would require that the lessee under any such
Leases or New Lease make or should have made any additions,
renovations or improvements to such property pursuant to the terms of
the Americans With Disabilities Act ("ADA") or otherwise; provided
however that the Shareholders and NCCI specifically disclaim any
warranty or representation that said property in its current state
conforms to the ADA.
5.17 ACCURACY OF STATEMENTS. Neither this Agreement nor any
----------------------
schedule, exhibit, statement, list, document, certificate or other
information furnished or to be furnished by or at the request of
Shareholders or NCCI to Purchaser or any representative or affiliate
of the Purchaser in connection with this Agreement or any of the
transactions contemplated hereby contains or will contain any untrue
statement of a material fact or will omit to state a material fact
necessary to make the statements contained herein or therein, in light
of the circumstances in which they are made, not misleading. All
representations, covenants and warranties made by or on behalf of
Sellers/Shareholders in this Agreement shall, pursuant to Section 10.1
hereof, survive the execution and delivery of this Agreement and the
closing of the transactions contemplated hereby.
* * *
In defending a claim based upon the breach of any representation,
warranty or covenant contained in this Agreement, Shareholders and
NCCI shall not assert as a defense thereto that Purchaser had
constructive knowledge of the falsehood of any such representation,
warranty or covenant.
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<PAGE>
SECTION 6. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
-------------------------------------------
Purchaser represents and warrants to the Shareholders and NCCI, as
follows:
6.1 ORGANIZATION AND GOOD STANDING. Monetary Management
------------------------------
Corporation is a corporation duly organized, validly existing and in
good standing under the laws of the State of New York and is in good
standing as a foreign corporation in the Commonwealth of Pennsylvania.
6.2 CONSENTS, AUTHORIZATIONS AND BINDING EFFECT.
-------------------------------------------
(a) Purchaser has full power and authority to execute and
deliver this Agreement and the other agreements and instruments to be
executed and delivered by it pursuant hereto, and to consummate the
transactions contemplated hereby and thereby. On or prior to the
Closing Date, all acts and other proceedings required to be taken by
or on the part of Purchaser to carry out this Agreement and such other
agreements and instruments and the transactions contemplated hereby
and thereby will have been duly and properly taken. This Agreement
has been duly executed and delivered by Purchaser and constitutes, and
such other agreements and instruments, when duly executed and
delivered by Purchaser, will constitute the legal, valid and binding
obligations of Purchaser enforceable in accordance with their
respective terms (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or other
similar laws and equitable principles affecting the enforcement of
creditors' rights generally from time-to-time in effect). The
execution and delivery by Purchaser of this Agreement and such other
agreements and instruments and the consummation of the transactions
contemplated hereby and thereby will not violate any law or conflict
with or result in any breach of or constitute a material default (or
an event which with notice or lapse of time or both would become a
material default) under any indenture, mortgage, lease, agreement or
other instrument to which Purchaser is a party or by which it may be
bound or affected provided that the consents and approvals disclosed
on Schedule 6.2 hereto have been obtained. Except as specifically
disclosed on Schedule 6.2 hereto, no approval, authorization, consent
or other order or action of or filing by the Purchaser with any court,
administrative agency, or other governmental authority is required for
the execution and delivery by the Purchaser of this Agreement or such
other agreements and instruments or its consummation of the
transactions contemplated hereby or thereby.
(b) Except as provided in Schedule 6.2 hereto, the
Purchaser may execute, deliver and perform this Agreement, the Non-
Competition Agreements and all other agreements to be executed in
connection herewith without the necessity of obtaining any consent,
approval, authorization or waiver or giving any notice or otherwise.
This Agreement constitutes and, when executed and delivered, the Non-
Competition Agreements
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<PAGE>
will constitute the legal, valid and binding obligations of the
Purchaser enforceable in accordance with their respective terms.
(c) The execution, delivery and performance of this
Agreement and the Non-Competition Agreements, assuming that the
consents, approvals, authorizations, waivers and notices set forth on
Schedule 6.2 hereto are obtained or given, will not constitute a
material violation of any statute, judgment, order, decree or
regulation or rule of any court, governmental authority or arbitrator
applicable or relating to the Purchaser.
6.3 FINANCIAL STATEMENTS AND FINANCIAL CONDITION OF MONETARY
--------------------------------------------------------
MANAGEMENT CORPORATION.
----------------------
(a) Annexed as Schedule 6.3(a) hereto are the unaudited
financial statements of Monetary Management Holdings, Inc., the parent
corporation of MMC ("MMH") for the eleven months ended May 31, 1995
(the "Financial Statements") and the balance sheets included therein
(the "Balance Sheets").
(b) The Financial Statements have been prepared in
accordance with the books of account of MMH, in conformity with
generally accepted accounting principles consistently applied, and
present fairly the financial position of MMH as of the date of the
Financial Statements and the results of operations of MMH for the
periods covered thereby; provided, however that the Financial
Statements may not contain all adjustments or footnotes necessary
under generally accepted accounting principles. However, they are
still prepared in conformity with sound accounting principles
consistently applied and, to MMH's knowledge, no material adjustments
or footnotes are omitted.
(c) MMH has no liabilities (absolute, contingent or
otherwise) which, in accordance with generally accepted accounting
principles, are required to be reflected, reserved or otherwise
disclosed in the Balance Sheets which are not reflected, reserved or
otherwise disclosed in said Balance Sheets except (i) those incurred
since the date of said Balance Sheet in the ordinary course of
business, consistent with past practice, in arm's length transactions
with unrelated parties, and which do not have and cannot reasonably be
expected to have, in the aggregate, a material adverse effect on the
business, operations, financial condition or prospects of MMH.
(d) Since the date of the Financial Statements, there has
been no material adverse change in the business, operations, financial
condition or prospects of MMH and to the best knowledge of MMH there
are no events with respect to any of the foregoing that threaten to
disrupt, prevent or impair in a materially adverse manner the conduct
of MMH's business going forward.
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<PAGE>
6.4 LITIGATION. No actions, suits, claims, proceedings or
----------
investigations (whether or not purportedly on behalf of or against
Purchaser), are pending or threatened against Purchaser at law or in
equity that relate to the transactions contemplated by this Agreement
or that will prohibit Purchaser from performing the obligations to be
performed by it hereunder.
* * *
In defending a claim based upon the breach of any representation,
warranty or covenant contained in this Agreement, Purchaser shall not
assert as a defense thereto that the Shareholders or NCCI had
constructive knowledge of the falsehood of any such representation,
warranty or covenant.
SECTION 7. COVENANTS OF THE PARTIES.
------------------------
For the purposes hereof, the term "reasonable efforts" when
utilized in this Section 7 and in Section 10, shall mean such efforts
as a reasonable man would take on his own behalf in the same
circumstance.
7.1 ACCESS TO RECORDS AND PROPERTIES. Between the date of this
--------------------------------
Agreement and the Closing Date, the Companies and the Shareholders
shall give to Purchaser such access to the premises, books and records
of the Companies and the Shareholders and shall cause the officers and
employees of the Companies to furnish such financial and operating
data and other information as Purchaser may from time to time
reasonably request. Purchaser agrees to refrain from conducting any
on-site due diligence at the Stores and from contacting employees of
the Companies without the Shareholders' prior consent which shall not
be unreasonably withheld. Pending the Closing, all of such
information not in the public domain shall be maintained
confidentially by Purchaser and not used for any purpose other than in
connection with the transactions contemplated hereby. From and after
the Closing Date, the Shareholders and NCCI shall give to Purchaser
free and unrestricted access to the books, files and records of the
Shareholders and NCCI relating to the operations of the Companies
relating to the Stores for the periods prior to and including the
Closing Date retained by the Shareholders or NCCI, if any, and
Purchaser shall give to the Shareholders and NCCI free and
unrestricted access to the books, files and records transferred to
Purchaser's control relating to the business and operations of the
Companies prior to the Closing, as the other shall from time to time
reasonably request. Prior to the destroying or disposing of such
books, files and records, the Shareholders/NCCI and Purchaser shall
give thirty (30) days' notice to the other of the intended destruction
or disposition, and the other,
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at its option, shall have the right to take possession of the same or
to make copies of the same at their or its expense.
Any investigation or access pursuant to this Section 7.1 shall be
conducted in such manner as not to interfere unreasonably with the
operation of the business of the other party.
7.2 OPERATION OF THE COMPANIES. From and after the date hereof
--------------------------
and until the Closing, the Shareholders and NCCI shall see to it that
the Companies:
(a) Operate their respective business diligently and only
in the usual, ordinary manner and, to the extent consistent with such
operations, use their reasonable efforts to (i) preserve the current
business organizations of the Companies and the Stores intact, and
(ii) preserve current relationships with employees of the Companies
and all other persons having business dealings with the Companies and
the Stores.
(b) Maintains their books, accounts and records in the
usual and ordinary manner, and in a manner that fairly and correctly
reflects their respective income, expenses, assets and liabilities in
accordance with sound accounting principles on a basis consistent with
prior years.
(c) Comply with all Federal, state, local and other
governmental (domestic or foreign) laws, statutes, ordinances, rules,
regulations, orders, writs, injunctions, decrees, awards or other
requirements of any court or other governmental or other authority or
body applicable to them or their properties and assets or to the
conduct of their business, and to substantially perform all of their
obligations under all contracts, agreements, franchises, licenses,
permits, instruments, undertakings or otherwise without default.
(d) Except in the ordinary course of business: make no
change in the compensation payable or to become payable to any
employee; make no change in any existing, or enter into any new,
arrangement or contract relating to management, executive or clerical
services or relating to the sharing of administrative or other
overhead or any management or supervisory fee; establish or make no
bonus, stock option, profit sharing, retirement or other similar
payment, plan or arrangement except as otherwise provided for herein
in the ordinary course of the administration of existing incentive,
welfare, retirement or other similar plans or arrangements hereinabove
referred to; and enter into no union contract and no employment
agreement, or agreement with any salesman or sales agent or any
franchise agreement, independent dealer/distributor agreement or other
contract or arrangement with respect to the performance of services
for any of the Companies.
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<PAGE>
(e) Not enter into, modify or extend any Assumed Contract,
or engage in any activity or transaction not substantially in the
ordinary course of business and in accordance with past practice.
(f) Not sell or dispose of any capital assets.
(g) Not mortgage, pledge or subject to any Lien (as defined
in Section 5.4) or charge or other encumbrance, any assets, tangible
or intangible, other than the lien of current state or local property
taxes not yet due.
(h) Not make any agreement, commitment or arrangement to
take any action materially inconsistent with the obligations under, or
prohibited by, the foregoing paragraphs.
7.3 CONSENTS AND NOTICES, ETC.. Promptly after the date hereof,
--------------------------
the Shareholders and NCCI shall use their reasonable efforts to obtain
all consents, waivers, approvals and authorizations listed in
Schedules 1.2(a) and 5.2(a) hereto which may be necessary from third
parties to effectuate this Agreement; to execute a new lease for the
Baseline Road property for a term expiring no earlier than August 15,
1996 and otherwise on terms substantially the same as the most recent
lease of that site; and to consummate the transactions contemplated
hereby in accordance with the terms hereof and shall give all notices
to third parties required to be given in contemplation and as a result
of the transactions contemplated by this Agreement. It shall however
be the responsibility of the Purchaser to obtain all permits, licenses
and approvals necessary to enable the Purchaser to operate the Stores
subsequent to Closing and Purchaser agrees to diligently pursue all
such licenses, permits and authorizations. In the event the Baseline
Road Lease is extended at a rental rate in excess of $1,000 per month,
such increase shall not be deemed to constitute a term substantially
different from the most recent lease.
7.4 COMPETING TRANSACTIONS. Prior to December 31, 1995, unless
----------------------
the Agreement is terminated in accordance with the terms hereof prior
to such date, the Shareholders and the Companies shall not take any
action, directly or indirectly, to negotiate, cause, promote,
authorize or agree to any transaction competing or interfering with
any of the transactions contemplated by this Agreement, including,
without limitation, any merger, consolidation or reorganization, or
acquisition or disposition of the equity securities or assets of any
of the Companies.
7.5 EFFORTS TO SATISFY CONDITIONS. The Shareholders and NCCI
-----------------------------
shall use their reasonable efforts to cause the conditions set forth
in Section 8 hereof to the obligations of Purchaser contained herein
to be satisfied to the extent that the satisfaction of such conditions
is within the control of the Shareholders and NCCI, and Purchaser
shall use its reasonable
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<PAGE>
efforts to cause the conditions to the obligations of the Shareholders
and NCCI contained in Section 9 hereof to be satisfied to the extent
that the satisfaction of such conditions is in the control of
Purchaser; however, the foregoing shall not constitute a limitation
upon the covenants and obligations of the Shareholders, NCCI and
Purchaser otherwise expressly set forth in this Agreement.
7.6 CONFIDENTIALITY. Purchaser agrees that for and in
---------------
consideration of the Shareholders' and NCCI's cooperation and
disclosure of sensitive business information, between the date hereof
and Closing, Purchaser shall hold in the highest degree of
confidentiality any and all information received from the Companies or
the Shareholders and not publish the same to any party not directly
involved in Purchaser's acquisition of the Shares and the NCCI Assets;
provided, however, that confidential information shall not include any
information which (1) was already known to Purchaser prior to delivery
or disclosure by the Shareholders or NCCI; or (2) is or becomes
publicly known to Purchaser through no wrongful act of Purchaser; or
(3) is rightfully received by Purchaser from third-party without
authorization of the Shareholders; or (4) is furnished by the
Shareholders or NCCI to a third-party without a similar restriction on
the third-party's rights; or (5) is disclosed pursuant to a
requirement of a governmental agency or disclosure is required by
operation of law. For periods subsequent to Closing, to the extent
that Purchaser is in possession of confidential information relating
to the Shareholders (and not the Companies) whether obtained from the
Shareholders prior to or subsequent to Closing, Purchaser shall treat
such confidential information as described above. The parties hereto
specifically acknowledge the existence of a prior Non-Disclosure
Agreement, dated May 31, 1995, regarding confidentiality undertakings,
and specifically acknowledge that the terms of such agreement are
hereby ratified and confirmed and will survive the execution of this
Agreement.
7.7 PUBLICITY. Without the consent of the Shareholders,
---------
Purchaser will not disclose in any manner to any employee or vendor of
the Companies that the parties hereto have entered into this
Agreement. No public announcement of the existence of this Agreement
shall be made by any party without the prior written consent of the
others.
7.8 EXCLUSIVE DEALING. Prior to December 31, 1995, unless this
-----------------
Agreement is terminated in accordance with the terms hereof prior to
such date, neither the Companies nor the Shareholders will offer the
Shares or the Assets (or any part thereof) for sale to any person
other than Purchaser nor will the Companies or the Shareholders enter
into negotiations with any other party for the disposition of the
Shares or the Assets (or any part thereof) and the Companies and
Shareholders agree that neither the Companies nor the Shareholders
will negotiate with any other parties relative to any disposition of
the Shares or the Assets (or any part thereof). Furthermore, the
Companies and the Shareholders will not, directly or indirectly ,
through any officer, director, agent or otherwise of the Companies,
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<PAGE>
solicit or initiate, directly or indirectly, or encourage submission
of inquiries, proposals or offers from any potential buyer, other than
Purchaser, or participate in any discussions or negotiations
regarding, or furnish to any person any information with respect to
the disposition of the Shares or the Assets (or any part thereof) for
purposes of effecting any of the foregoing.
7.9 RELATIONSHIPS; EMPLOYEES.
------------------------
(a) While the Shareholders and NCCI make no representation
that any employee (leased or otherwise) of the Companies will continue
employment with LMS, PRE or the Purchaser following the Closing Date,
the Shareholders and NCCI will (i) cooperate in permitting Purchaser
to discuss employment with the employees and executives of the
Companies and will encourage such persons to accept any proffered
employment and will not interfere in any negotiations between
Purchaser and such persons with regard to such employment; and (ii)
take no action which will impede the goodwill of customers and others
having a business relationship with the Companies and take no action
which will impede Purchaser and its representatives in their efforts
to persuade such persons to continue such relationship after Closing
Date. Notwithstanding the foregoing, the Sellers shall have the right
to have a representative of Sellers present when, if ever, Purchaser
has any discussions regarding employment with any of the Companies'
employees on Company time and shall have the right to reasonably limit
any such discussions undertaken on Company time.
(b) Purchaser will conduct itself in accordance with
applicable laws and regulations in dealing with the employees of LMS
and PRE and the Stores subsequent to Closing; and will not
unreasonably interfere with the operations of the Companies prior to
Closing while discussing employment related matters with the employees
of LMS, PRE and the Stores.
SECTION 8. CONDITIONS TO OBLIGATIONS OF PURCHASER. The
--------------------------------------
obligations of Purchaser to consummate the purchase and sale of the
Shares and the NCCI Assets under this Agreement are subject to the
satisfaction of the following conditions, each of which may be waived
by Purchaser.
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<PAGE>
8.1 FINANCING. The acquisition by Purchaser of financial
---------
commitments on terms satisfactory to Purchaser, sufficient to fund the
proposed acquisitions. This Agreement shall automatically terminate
if on or before September 11, 1995, Purchaser has not notified the
Shareholders of the satisfaction or waiver of this condition.
8.2 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS.
----------------------------------------------------------
(a) The representations and warranties of the Shareholders
and NCCI set forth in Section 5 hereof and in all agreements,
documents and instruments executed and delivered pursuant hereto or in
connection with the Closing of the transactions contemplated hereunder
shall in the aggregate have been, on the date hereof and shall be on
the Closing Date, true and correct in all material respects as though
made on and as of the Closing Date.
(b) The Shareholders and NCCI shall have materially
performed the agreements and obligations necessary to be performed by
them under this Agreement prior to the Closing Date, and performed in
accordance with the covenants set forth in Section 7 hereof. Without
limiting the generality of the foregoing, the Shareholders and NCCI
shall have obtained all consents, waivers, approvals and
authorizations, and shall have given all notices to third parties, as
in the aggregate are necessary to convey, sell, transfer, assign and
deliver to Purchaser all of the Shares and the NCCI Assets and to vest
in Purchaser all right, title, interest and claims of the Companies
in, to, relating to or arising under the Assets, free and clear of any
Liens (as defined in Section 5.4); excluding, however, the waivers,
authorizations, consents, licenses, permits and approvals to be
obtained by Purchaser as described above. To the extent that the
Shareholders and NCCI are unable to obtain the consent of the
landlords/lessors under the Leases or the other party(ies) to the
other Assumed Contracts without remaining responsible under one or
more of the Leases or other Assumed Contracts (if they are already
responsible thereunder, as a guarantor or otherwise) the Shareholders
and NCCI shall obtain such consents and Purchaser shall defend,
indemnify and hold them harmless against any losses, etc. which may be
suffered under such Leases or other Assumed Contracts, including,
without limitation, court costs and reasonable attorney's fees.
(c) The continued operation of the Stores in the normal
course of business between the date hereof and the Closing Date.
(d) The absence of any material deterioration (or
alteration) of the Assets and the Shares or the value thereof between
the date hereof and the Closing Date, including, but not limited to,
material loss of customers, material employee/management attrition,
material destruction of equipment, force majeure, declaration of war
or enactment of material adverse legislation.
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<PAGE>
(e) The Shareholders and NCCI shall have delivered to
Purchaser a certificate, in substantially the form attached hereto as
Exhibit B executed by the Shareholders, to the effect that the
conditions set forth in subparagraphs 8.1(b) and 8.1(c) above have
been satisfied.
8.3 TRANSFER OF SHARES AND NCCI ASSETS. The Shareholders shall
----------------------------------
deliver at Closing to Purchaser certificate(s) representing the
Shares, with stock powers separate from certificates executed in
blank, and such bills of sale with covenants of warranty, assignments,
special warranty deeds with covenants against grantor's acts only, and
other good and sufficient instruments of transfer and conveyance, in
form and substance reasonably satisfactory to Purchaser and its
counsel, as shall be effective to vest in Purchaser, and to evidence
the vesting in Purchaser of, good and marketable title to the NCCI
Assets and the Shares and to verify the ownership of LMS and PRE in
the Assets other than the NCCI Assets, as provided for, and subject to
the limitations and exceptions set forth, in this Agreement.
8.4 OPINION(S) OF COUNSEL TO THE SHAREHOLDERS AND NCCI.
--------------------------------------------------
Purchaser shall have received at Closing opinion(s) of counsel(s) to
the Shareholders and NCCI, satisfactory to Purchaser, dated the
Closing Date, in substantially the form attached hereto as Exhibit C.
8.5 RESIGNATIONS. The Shareholders and NCCI shall deliver, on
------------
the Closing Date, resignations or termination notices, effective as of
the Closing Date, regarding the officers and directors of LMS and PRE
and such employees of the Stores as Purchaser shall request; and shall
remain or become responsible for any severance or bonus or similar
payments due to such persons.
8.6 NO ADVERSE CHANGE OR MATERIAL DISCREPANCIES; DUE DILIGENCE.
----------------------------------------------------------
There shall not have occurred between the date hereof and the Closing
Date any changes which in the aggregate have a material adverse effect
on Purchaser's valuation of the Shares and/or the Assets or otherwise
on the operations, condition (financial or otherwise), assets or
business of the Companies and the Shareholders and NCCI shall have
delivered to Purchaser a certificate to such effect, in substantially
the form attached hereto as Exhibit B.
Purchaser, through its attorneys, accountants, employees, agents
or assignees, shall (i) not have discovered, in the course of its due
diligence review of the transactions contemplated hereby, that the
financial condition or history of operations of the business of the
Companies and the Stores is materially different than the condition
and/or history represented to Purchaser by the Shareholders and NCCI
in the context of the negotiation of the instant acquisition; and (ii)
have completed a satisfactory due diligence review of the Stores and
Sellers' business following the execution hereof.
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<PAGE>
8.7 GOVERNMENTAL AND OTHER APPROVALS. Any licenses, permits,
--------------------------------
approvals, consents, authorizations and waivers by governmental
agencies or private parties necessary to consummate the transactions
contemplated by this Agreement as set forth on Schedules 1.2(a) and
5.2(a) hereto, shall have been obtained on terms reasonably
satisfactory to Purchaser, including, but not limited to, any licenses
required by the States of Arizona, California, Ohio or Wisconsin to
operate the Stores. Purchaser shall use its best efforts to obtain
such licenses, etc., as promptly as possible.
8.8 NON-COMPETITION AGREEMENTS. The Shareholders and NCCI shall
--------------------------
each have delivered to Purchaser at Closing a duly executed Non-
Competition Agreement, in the form annexed hereto as Exhibit A-1
through A-4, as applicable.
8.9 OTHER MATTERS. At Closing, the Shareholders and NCCI shall
-------------
have furnished, or caused to be furnished, to Purchaser, in form and
substance reasonably satisfactory to Purchaser, such certificates and
other evidence as Purchaser may have reasonably requested as to the
satisfaction of the conditions contained in this Section and as to
such other matters relating to the representations, warranties,
covenants and undertakings in this Agreement as Purchaser may
reasonably request.
8.10 BOARD APPROVAL. The final approval of the transactions
--------------
contemplated hereby by the Purchaser's board of directors.
SECTION 9. CONDITIONS TO OBLIGATIONS OF THE SHAREHOLDERS AND
-------------------------------------------------
NCCI. The obligations of the Shareholders and NCCI to consummate the
----
sale and purchase under this Agreement and to execute and deliver the
Non-Competition Agreements are subject to the satisfaction of the
following conditions, each of which may be waived by the Shareholders
and NCCI in writing.
9.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS.
----------------------------------------------------------
(a) The representations and warranties of Purchaser set
forth in Section 6 hereof and in all agreements, documents and
instruments executed and delivered pursuant hereto or in connection
with the Closing of the transactions contemplated hereunder shall have
been and be true and correct in all respects at all times commencing
with the date of this Agreement and ending with and on the Closing
Date as though made on and as of the Closing Date.
(b) Purchaser shall have performed the agreements and
obligations necessary to be performed by it under this Agreement prior
to the Closing Date.
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<PAGE>
(c) Purchaser shall have delivered to Sellers at Closing a
certificate, executed by Purchaser, in substantially the form attached
hereto as Exhibit D, to the effect that the conditions set forth in
subparagraphs 9.1(a) and 9.1(b) above have been satisfied.
9.2 OPINION OF COUNSEL TO PURCHASER. The Shareholders and NCCI
-------------------------------
shall have received the opinion of Klehr, Harrison, Harvey, Branzburg
& Ellers, dated the Closing Date, in substantially the form attached
hereto as Exhibit E.
9.3 PURCHASE PRICE. At Closing, purchaser shall have delivered
--------------
the Purchase Price pursuant to Section 3 hereof.
9.4 NON-COMPETITION AGREEMENTS. Purchaser shall have delivered
--------------------------
to each of the Shareholders and NCCI at Closing a duly executed Non-
Competition Agreement, in the forms annexed hereto as Exhibits A-1, A-
2, A-3, and A-4.
9.5 NO ADVERSE CHANGE. There shall have been no developments
-----------------
since the date of this Agreement materially adversely affecting the
financial condition of Purchaser and its ability to perform its
obligations hereunder and under the Non-Competition Agreements.
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
-------------------------------------------
INDEMNIFICATION.
---------------
10.1 SURVIVAL. The representations, warranties and agreements
--------
made in Sections 5 and 6 hereof and in the Schedules hereto by
Purchaser and the Shareholders and NCCI shall remain operative and in
full force for two (2) years after the Closing Date except with
respect to tax matters as to which such representations and warranties
shall continue to survive for the period of any applicable statutes of
limitation.
10.2 (a) INDEMNIFICATION BY THE SHAREHOLDERS AND NCCI. The
--------------------------------------------
Shareholders and NCCI hereby jointly and severally agree to defend,
indemnify and hold Purchaser and its officers, directors,
shareholders, agents and affiliates and their respective successors
and assigns (for purposes of this Section 10.2, collectively, the
"Purchaser") harmless from and against any and all losses, liabilities
(accrued, absolute, contingent or otherwise), suits, proceedings,
demands, settlements, judgments, fines, assessments, damages, expenses
and costs (including reasonable attorneys' fees and litigation
expenses) (collectively, the "Indemnifiable Damages") which Purchaser
may suffer or incur by reason of, or which may arise out of: (i) the
inaccuracy of any of the representations and warranties of the
Shareholders and NCCI contained in this Agreement; (ii) the breach by
the Shareholders or NCCI of any of the covenants, warranties or
agreements made by them in this Agreement; (iii) any claim for payment
of any liability of the Companies not specifically assumed by the
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Purchaser pursuant hereto; or (iv) any legal obligation to remediate
any environmental condition resulting from or arising during the
Shareholders' or the Companies' operation of the Property prior to the
Closing Date, provided, however, that the Shareholders and NCCI shall
only be liable with respect to an Indemnifiable Damages if the
aggregate Indemnifiable Damages, singly or in the aggregate, equal or
exceed $25,000 and then only to the extent of any such excess. In no
event shall the Shareholders or NCCI be obligated under this Section
to indemnify Purchaser to the extent any claim results from
Purchaser's negligence or willful misconduct. In no event shall the
Shareholders or NCCI be obligated to indemnify Purchaser for
Indemnifiable Damages in excess of the Purchase Price actually
received by the Shareholders and NCCI.
(b) INDEMNIFICATION BY PURCHASER. Purchaser hereby agrees
----------------------------
to defend, indemnify and hold the Shareholders and NCCI harmless from
and against the Indemnifiable Damages which they may suffer or incur
by reason of or which may arise out of: (i) the inaccuracy of any of
the representations and warranties of Purchaser contained in this
Agreement; (ii) the breach by Purchaser of any of the covenants,
warranties or agreements made by it in this Agreement; (iii) any claim
for payment of any Contract Liability or Credited Liability assumed by
Purchaser hereunder or otherwise relating to the ownership or
operation of the Stores after the Closing Date, including, but not
limited, to any such liability arising after the Closing Date under
the Assumed Contracts; and (iv) any legal obligations to remediate any
environmental condition resulting from or arising during the
Purchaser's operation of the Property after the Closing Date. In no
event shall Purchaser be obligated under this Section to indemnify the
Shareholders or NCCI to the extent any claim results from their
negligence or willful misconduct.
10.3 TAX MATTERS. The Shareholders and NCCI shall pay and shall
-----------
defend, indemnify and hold harmless Purchaser and its affiliates from
and against any and all taxes (including interest and penalties
thereon, if any) that may be imposed on or assessed against or
otherwise claimed to be due from any of the Companies or the
Shareholders with respect to any of the Companies (i) with respect to
all taxable periods up to and including the date of Closing; and/or
(ii) arising out of the inclusion of any of the Companies in any
consolidated, combined or unitary group of which the Companies is or
was a member on or prior to the date of Closing; and/or (iii) arising
from or relating to the distribution of the Excluded Assets to the
Shareholders. Sellers shall prepare and file at appropriate times
after Closing, the final state and federal Subchapter S Income Tax
Returns of LMS and PRE for the period January 1, 1995 through Closing.
The parties acknowledge that the sale of all of the issued and
outstanding stock of LMS and PRE to Purchaser, itself a corporation,
will automatically cause the termination of the Subchapter S elections
which are currently in place for both LMS and PRE. Such terminations
will necessitate the filing of two income tax returns for LMS and PRE
during 1995, one a Federal Form 1120-S (and accompanying state income
tax
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<PAGE>
returns) for January 1, 1995, through Closing, including all of each
Company's income through Closing and a second post-Closing Form 1120
for both Companies (along with accompanying state income tax returns)
filed as a Subchapter C corporation for the period commencing at
Closing and ending on the fiscal year end selected by Purchaser for
both Companies. Purchaser and Seller shall cooperate in the
preparation and filing of such final Subchapter S returns for both LMS
and PRE. Purchaser shall have the right to review and approve the
filings to be made by Sellers as described above. Purchaser shall pay
or cause LMS or PRE to pay and shall defend, indemnify and hold
harmless the Shareholders and NCCI from and against any and all taxes
(including interest and penalties thereon, if any) (a) that may be
imposed on or assessed against LMS or PRE with respect to taxable
periods ending after the date of Closing (except for taxable periods
beginning before the date of Closing and ending after the date of
Closing to the extent such taxes are attributable to the Shareholders
or NCCI pursuant to clause (i) of this Paragraph and (b) arising from
any taxable income of LMS or PRE after the date of Closing by reason
of an election under section 338 of the Code, or under any similar tax
provision which exists or which may come to exist under any federal or
state tax law.
10.4 NOTICE AND RIGHT TO DEFEND THIRD PARTY CLAIMS.
---------------------------------------------
(a) Promptly upon receipt of notice of any third party
claim, demand or assessment or the commencement of any suit, action or
proceeding in respect of which indemnity may be sought on account of
an indemnity agreement contained in this Section 10, the party seeking
indemnification (the "Indemnitee") shall notify in writing, within
sufficient time to respond to such claim or answer or otherwise plead
in such action, the party or parties from whom indemnification is
sought (the "Indemnitor") thereof; provided, however, that failure or
-------- -------
delay to supply such notice shall not relieve Indemnitor of its
indemnification obligation hereunder except to the extent that
Indemnitor is actually prejudiced by such failure or delay.
(b) In case any claim, demand or assessment is asserted or
suit, action or proceeding commenced against an Indemnitee
(collectively a "Claim"), and it notifies the Indemnitor of the
commencement thereof, if the Indemnitor acknowledges its
indemnification obligations therefor hereunder, then the Indemnitor
shall be entitled to participate therein, and, to the extent that it
may wish, to assume the defense, conduct or settlement thereof, with
counsel satisfactory to the Indemnitee, whose consent to the selection
of counsel shall not unreasonably be withheld. After notice from the
Indemnitor to the Indemnitee of its election so to assume the defense,
conduct or settlement thereof, the Indemnitor shall not be liable to
the Indemnitee for any legal or other expenses subsequently incurred
by the Indemnitee in connection with the defense, conduct or
settlement thereof; provided, however, that if the Indemnitee has any
-------- -------
separate defense from that of the Indemnitor, the Indemnitee
-34-
<PAGE>
shall have the right to be represented by its own counsel at the
Indemnitee's expense. The Indemnitee shall have the right in any
event to participate in any such defense with its own counsel at its
own expense. The Indemnitee will cooperate with the Indemnitor in
connection with any such Claim and make personnel, books and records
relevant to the Claim available to the Indemnitor at Indemnitor's
expense. In the event that the Indemnitor fails timely to defend,
contest or otherwise protect against any such Claim, the Indemnitee
shall have the right to defend, contest or otherwise protect against
the same and may make any compromise or settlement thereof and recover
the entire cost thereof from the Indemnitor, including, without
limitation, reasonable attorneys' fees, disbursements and all amounts
paid as a result of such claim or compromise or settlement thereof.
(c) Anything to the contrary herein notwithstanding, prior
to finally settling any such Claim, the Indemnitor shall give to the
Indemnitee prompt notice of its intention to settle the same and the
terms of such proposed settlement and acknowledging their
indemnification responsibility therefor hereunder. If the Indemnitee
shall object to such proposed settlement within 20 calendar days, then
the Indemnitee shall thereafter, at its sole expense, assume the
control and defense of such claim, suit, action, investigation or
proceeding and in such event the liability of the Indemnitor shall be
limited to the amount for which the same could have been settled as
proposed by the Indemnitor. If the Indemnitee does not object to the
terms of the proposed settlement within the aforesaid 20 calendar day
period, then the Indemnitor shall have the right to consummate such
proposed settlement upon the terms set forth in the aforesaid notice.
10.5 PAYMENT OF AMOUNTS DUE. The amount of any indemnifiable
----------------------
damages conceded or determined to be due from the Shareholders or NCCI
to Purchaser, pursuant to any of the provisions of this Section 10,
shall be paid by the Shareholders or NCCI to Purchaser within ten (10)
business days from the date so conceded or determined. Purchaser may
pursue any such amounts from any of the Shareholders and/or NCCI. The
amount of any indemnifiable damages conceded or determined to be due
from Purchaser to the Shareholders or NCCI, pursuant to any of the
provisions of this Section 10, shall be paid to the Shareholders or
NCCI by Purchaser within ten (10) business days from the date so
conceded or determined.
10.6 EFFORTS TO MINIMIZE DAMAGES. Each Indemnitee hereunder
---------------------------
shall make reasonable efforts to minimize the extent of Indemnifiable
Damages suffered. Notwithstanding the foregoing, an Indemnitee shall
not be required to take any particular action in order to minimize any
such Indemnifiable Damages.
-35-
<PAGE>
SECTION 11. BULK TRANSFER LAWS. Purchaser hereby waives
------------------
compliance by the Shareholders and NCCI with the provision of any so
called Bulk Transfer Laws of any jurisdiction in connection with any
of the transactions contemplated hereby. The Shareholders and NCCI
hereby indemnify and hold harmless the Purchaser against any and all
liabilities which may be asserted by third parties against the
Purchaser, LMS or PRE as a result of non-compliance with any such Bulk
Transfer Laws.
SECTION 12. FURTHER ACTIONS. From time to time the parties
---------------
shall execute and deliver, or cause to be executed and delivered, such
reasonable documents and instruments and shall take, or cause to be
taken, such further or other actions as are necessary or reasonably
desirable to carry out the intent and purposes of this Agreement, to
convey, transfer, assign and deliver to Purchaser, and its successors
and assigns, the Shares and the NCCI Assets (or to evidence any of the
foregoing) and to consummate and give effect to the other
transactions, covenants and agreements contemplated hereby.
SECTION 13. TERMINATION. This Agreement shall terminate and
-----------
shall be of no further force or effect:
(i) Upon mutual agreement of the parties;
(ii) Except as to the provisions of Section 14(a)
below, upon written notice by the Purchaser in the event that the
conditions specified in Section 8.2(b) above have not been satisfied
on or before September 11, 1995. Such notice may be given at any time
after said date so long as at the date of notice, the condition(s)
referred to have still not been satisfied. Notwithstanding the
foregoing, if Purchaser gives notice of termination pursuant to this
Section 13(ii), and if as of giving of such notice the "Minimum Lease
Condition" (as hereinafter defined) is satisfied, Shareholders/NCCI
shall have the right to deliver to Purchaser notification in writing,
within five (5) days of the giving of Purchaser's notice under Section
13(ii), of its/their election to consummate the transactions
contemplated hereby utilizing the escrow arrangement described in
Section 14(b) below.
(iii) Except as to the provisions of Section 14(a)
below, upon written notice given by the Purchaser or the
Shareholders/NCCI in the event the Closing has not occurred on or
before December 31, 1995, due to a circumstance not resulting from or
caused by any act or omission of the party giving such written notice;
(iv) Upon written notice given by the Purchaser or the
Sellers to the other in the event a material law, regulation or
judicial decree prohibits the Closing; or
-36-
<PAGE>
(v) Except as to the provisions of Section 14 below,
upon written notice given by the Purchaser or the Sellers to the other
in the event that any representation or warranty made by the other
party herein was incorrect in any material respect when made; or that
such other has failed to perform any covenant contained herein in any
material respect and such failure has continued for thirty (30)
business days following notice of such failure.
SECTION 14. OTHER AGREEMENTS.
----------------
(a) Right of First Refusal. If, despite the termination of
----------------------
this Agreement, prior to December 31, 1995, the Companies and/or the
Shareholder(s) receive(s) a bona fide offer to acquire the Assets (or
a portion thereof) or the Shares (or a portion thereof), the Purchaser
shall have the absolute right to match such offer and to acquire the
Assets or the Shares upon the terms of such bona fide offer.
(b) Minimum Lease Assignments; Baseline Road Lease. The
----------------------------------------------
Shareholders and NCCI are required under Section 8.2(b) to obtain all
of the consents of the landlord/lessors under the Leases to the
"assignment" of such Leases to the Purchaser or its nominee(s) as are
necessary to assign and deliver such Leases to Purchaser. If the
Shareholders and NCCI obtain the assignment consent of the
landlord/lessor under the "Star Store" Leases (as indicated on
Schedule 14(a)) or provide an opinion of counsel that such consent is
not required, as well as the consent of the landlord/lessor under at
least 7 of the remaining 11 Store Leases (not including the New Lease
or the Baseline Road Lease, both as defined below) or provide said
opinion, the "Minimum Lease Condition" for purposes of Section 13(ii)
hereof shall be deemed to be met. Assuming the satisfaction of the
Minimum Lease Condition, if the Shareholders/NCCI shall give the
notice referred to in Section 13(ii), as to each Lease as to which the
Shareholders and NCCI have not obtained a consent (or provided said
opinion) acceptable to Purchaser as of Closing, the amount of $100,000
out of the Purchase Price shall be placed into escrow (jointly
administered by legal counsel for each of the Purchaser and the
Shareholders) pending receipt and delivery of such consent. Any such
amounts shall be held in escrow pursuant to the form of escrow
agreement attached as Exhibit F.
(i) In the event that no consent is thereafter
procured as to a particular Lease and Purchaser is either forced to or
elects to move the location of the subject Store to another site, all
relocation and related costs of the Purchaser incurred in connection
with the relocation of such Store shall be reimbursed to Purchaser out
of the escrowed amount for such Store.
-37-
<PAGE>
(ii) In the event that a consent in substantially the
form proffered by Purchaser is thereafter procured, the funds escrowed
as to the particular Store shall be remitted to the Shareholders and
NCCI.
(iii) In the event neither of the above occurs as
to a particular Store within one (1) year of the Closing Date, the
funds escrowed as to that particular Store shall be split equally
between Sellers and Purchaser.
(c) As of the date hereof, the Lease pertaining to the
Store located on Baseline Road in Phoenix, Arizona (the "Baseline Road
Lease"), has expired. Pursuant to Section 7.3 hereof, the
Shareholders have undertaken to execute a new lease for such property
for a term expiring no earlier than August 15, 1996 and otherwise on
substantially similar terms to the most recent lease of that site. If
as of Closing, such new lease shall not have been executed, the
Purchase Price shall be reduced by $50,000. If such new lease is
executed and provides for a monthly rental rate of more than $1,000
per month, then Sellers shall credit towards the Purchase Price
allocable to the LMS shares an amount equal to such monthly excess
over $1,000 multiplied by the number of months remaining under the new
lease as of Closing or 12, which ever is less, and there shall be no
other reduction in the Purchase Price.
(d) The property on which the Reading Road Store is
presently located is now owned by NCCI. At Closing, NCCI shall enter
into a lease with Purchaser or its nominee concerning such property
for a period of five (5) years with two (2) five (5) year options.
Such lease shall provide for rent at a 10% discount to current market
rate. The lease shall be in substantially the form attached hereto as
Exhibit G.
SECTION 15. EXPENSES; BROKERS.
-----------------
(a) Except as otherwise specifically provided herein, the
Shareholders and Purchaser shall bear their own legal fees and other
costs and expenses with respect to the negotiation, execution and the
delivery of this Agreement and the consummation of the transactions
hereunder, and the assets of the Companies other than the Excluded
Assets shall not be reduced or impaired by the payment or accrual of
any such costs and expenses. Any sales, use, conveyance or transfer
taxes ("Tax") relating to the conveyance of the Assets, if applicable,
in connection with the transactions contemplated herein shall be paid
by the party on whom such liability is imposed by applicable law.
(b) The Purchaser, on the one hand, and the Shareholders
and NCCI, on the other, represent and warrant each to the other that
they have not engaged the services of any broker or finder in
connection with the transactions herein provided for.
-38-
<PAGE>
SECTION 16. CONSTRUCTION.
------------
(a) The descriptive headings of this Agreement are for
convenience only and shall not control or affect the meaning or
construction of any provision of this Agreement.
(b) Any representation or warranty made to the knowledge of
any parties hereto, or as to what any such party is aware of, or
statements of similar purport, shall mean that such party has made a
reasonable investigation of the facts in connection therewith and is
making such representation or warranty based upon the results of such
investigation.
(c) The terms "material" and "materially" when used with
respect to amounts of money or values shall refer to an amount or
amounts of $50,000 or more individually or in the aggregate.
SECTION 17. NOTICES. All notices or other communications which
-------
are required or permitted hereunder shall be in writing and sufficient
when delivered personally or telecopied by confirmed facsimile, or two
(2) days after being sent by nationally recognized overnight courier
with proof of delivery, in each case postage prepaid, addressed as
follows:
If to Purchaser:
Monetary Management Corporation
1436 Lancaster Avenue, Suite 210
Berwyn, Pennsylvania 19312
Attention: Donald F. Gayhardt, Executive Vice President -
Corporate Development
Telecopy No. (610) 296-7844
with a copy to:
Klehr, Harrison, Harvey, Branzburg & Ellers
1401 Walnut Street
Philadelphia, Pennsylvania 19102
Attention: Brian J. Sisko, Esq.
Telecopy No. (212) 568-6603
If to Shareholders:
Larry M. Senderhauf
7525 Gainey E. Ranch Road
Scottsdale, Arizona 85258
-39-
<PAGE>
E. Rick Safford
226 Burgundy Rd.
Healdsburg, California 95448
Fred T. Kampo, Jr.
1701 Murmuring Waters Lane
Osh Kosh, Wisconsin 54901
NCCI Corporation
1701 Murmuring Waters Lane
Osh Kosh, Wisconsin 54901
with a copy to:
John M. Kelly, Esquire
Dempsey, Magnusen, Williamson & Lampe
Firstar Bank Building
One Pearl Avenue
P.O. Box 886
Osh Kosh, Wisconsin 54902
SECTION 18. GOVERNING LAW. This Agreement shall be governed by
-------------
and construed in accordance with the laws of the Commonwealth of
Pennsylvania without regard to conflicts of law.
SECTION 19. ASSIGNABILITY. This Agreement shall be binding upon
-------------
the parties and their respective successors and assigns; provided,
however, that this Agreement and the rights, privileges, duties and
obligations of the Shareholders and NCCI herein may not be assigned or
delegated without the prior written consent of Purchaser. Purchaser
may assign its rights and privileges hereunder but not its duties or
obligations.
SECTION 20. WAIVERS AND AMENDMENTS. Any waiver of any term or
----------------------
condition of this Agreement, or any amendment or supplement of this
Agreement, shall be effective only if in writing executed by the party
against whom such waiver, amendment or supplement is sought to be
enforced. A waiver of any breach or failure to enforce any of the
terms or conditions of this Agreement shall not in any way affect,
limit or waive a party's rights
-40-
<PAGE>
hereunder at any time to enforce strict compliance thereafter with
every term or condition of this Agreement.
SECTION 21. THIRD PARTY RIGHTS. Notwithstanding any other
------------------
provision of this Agreement, and except as expressly provided in
Section 10 hereof, this Agreement shall not create benefits on behalf
of any third party, and this Agreement shall be effective only as
among the parties hereto, their successors and permitted assigns.
SECTION 22. ILLEGALITIES. In the event that any provision
------------
contained in this Agreement shall be determined to be invalid, illegal
or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision in every other respect and
the remaining provisions of this Agreement shall not, at the election
of the party for whose benefit the provision exists, be in any way
impaired.
SECTION 23. NO PRESUMPTION AGAINST THE DRAFTER. Each of the
----------------------------------
parties to this Agreement participated in the drafting of this
Agreement and the interpretation of any ambiguity contained in this
Agreement will not be affected by the claim that a particular party
drafted any provision hereof.
SECTION 24. COUNTERPARTS. This Agreement may be executed in
------------
multiple counterparts all of which taken together shall constitute one
and the same instrument. This Agreement shall not be deemed effective
until signed by all parties.
SECTION 25. ENTIRE AGREEMENT. This Agreement (including the
----------------
Schedules and the Exhibits delivered pursuant hereto) constitutes the
entire agreement between the parties and pertaining to the subject
matter hereof and supersedes all prior and contemporaneous agreements,
understandings, negotiations and discussions, whether oral or written,
of the parties.
-41-
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement
as of the date first above written.
MONETARY MANAGEMENT CORPORATION
By: /s/ Donald F. Gayhardt
------------------------------
Donald F. Gayhardt,
Executive Vice President
Attest: [signature illegible]
NCCI CORPORATION
By: /s/ Fred T. Kampo, Jr.
------------------------------
Fred T. Kampo, Jr., President
Attest: [signature illegible]
LARRY M. SENDERHAUF
/s/ Larry M. Senderhauf
-----------------------------------------
-42-
<PAGE>
E. RICK SAFFORD
/s/ E. Rick Safford
____________________________________________
FRED T. KAMPO, JR.
/s/ Fred T. Kampo, Jr.
____________________________________________
-43-
<PAGE>
SCHEDULES AND EXHIBITS TO PURCHASE AGREEMENT
DATED JULY 28, 1995
<PAGE>
SCHEDULES AND EXHIBITS
----------------------
TO
--
PURCHASE AGREEMENT
------------------
JULY 28, 1995
SCHEDULE NUMBER BRIEF DESCRIPTION
--------------- -----------------
1.2(a) Licenses and Authorizations
1.2(b) Personal Property
1.2(c) Leased Real Property
1.2(e) Intellectual Property, etc.
2.3 Agreed Prepaid Expenses
3 Allocation
5.2(a) Required Consents, Approvals, Authorizations,
Waivers and Notices
5.2(c)(iii) Acceleration of Debts and Obligations
5.3(b) Financial Statements
5.3(d) Liabilities not reflected on the Balance
Sheets
5.7(a) Taxes
5.8(a) Compensation of Employees
5.8(b) Termination of Employment
5.9 Employee Benefit Plans
<PAGE>
5.11(a) Contracts
5.13 Environmental Matters
6.2 Consents required by Purchaser
14(a) Star Store Leases
<PAGE>
EXHIBITS
--------
A-1, A-2, A-3 and A-4 Non-Competition Agreements
B Form of Certificate of Sellers pursuant to
Section 8.2(e)
C Form of Opinion of Sellers' Counsel
D Form of Certificate of Purchaser pursuant to
Section 9.2(c)
E Form of Opinion of Purchaser's Counsel
F Form of Escrow Agreement
G Form of Lease
<PAGE>
SCHEDULE 3
----------
PURCHASE PRICE ALLOCATION
-------------------------
LMS Shares $ 2,160,000*
Pacific Ring Enterprises Shares 3,712,500
NCCI Assets 877,500
Fixed Assets 105,000
Customer Lists and
Goodwill 772,500
____________
TOTAL: $ 6,750,000*
________________________
* To be reduced as required by Section 14.
<PAGE>
SCHEDULE 6.2
------------
CONSENTS REQUIRED BY PURCHASER
------------------------------
1. Financing Approval
2. Arizona, California, Ohio and Wisconsin licenses to operate
Stores.
<PAGE>
SCHEDULE 6.3
------------
PURCHASER FINANCIAL STATEMENT
-----------------------------
<PAGE>
SCHEDULE 14(A)
--------------
STAR STORE LEASES
-----------------
1. 1954 W. Broadway, Phoenix, AZ
2. 2346 Newport Blvd., Costa Mesa, CA
3. 105 S. Harbor Blvd., Santa Ana, CA
4. 1811 W. Bell Rd., Phoenix, AZ
5. 14040 Goldenwest St., Westminster, CA
6. 1150 N. Harbor Blvd., Anaheim, CA
7. 3501 W. Dunlap Ave., Phoenix, AZ
Exhibit 10.7
<PAGE>
PURCHASE AGREEMENT
BY AND AMONG
DOLLAR FINANCIAL GROUP, INC.
AS PURCHASER,
DFG HOLDINGS, INC.,
ANY KIND CHECK CASHING CENTERS, INC.,
THE PERSONS LISTED ON SCHEDULE II,
AS THE SHAREHOLDERS,
U.S. CHECK EXCHANGE LIMITED PARTNERSHIP
THE PERSONS LISTED ON SCHEDULE III,
AS THE LIMITED PARTNERS
AND
GEORGE H. BRIMHALL
INDIVIDUALLY, AND
AS THE SELLERS' REPRESENTATIVE
Dated as of August 8, 1996
<PAGE>
TABLE OF CONTENTS
------------------
Section Page
------- ----
ARTICLE I
SALE AND PURCHASE OF SHARES AND LP INTERESTS 2
1.1 Sale and Purchase of Shares and LP Interests 2
--------------------------------------------
1.2 Assets 2
------
1.3 Excluded Assets 4
---------------
1.4 Apportionments 5
--------------
1.5 Capital Expenditures 5
--------------------
ARTICLE II
PURCHASE PRICE AND PAYMENT 6
2.1 Amount of Purchase Price 6
------------------------
2.2 Payments of Cash 6
----------------
2.3 Issuance of DFG Common Stock 6
----------------------------
2.4 Certification of Amount of Cash on Hand 7
---------------------------------------
2.5 Ralph's Kiosk Contract 7
----------------------
2.6 Post-Closing Adjustment 8
-----------------------
ARTICLE III
CLOSING AND TERMINATION 9
3.1 Closing Date 9
------------
3.2 Termination of Agreement 9
------------------------
3.3 Procedure Upon Termination 10
--------------------------
3.4 Effect of Termination 10
---------------------
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLERS 10
4.1 Organization and Good Standing 11
------------------------------
4.2 Authorization of Agreement 11
--------------------------
4.3 Capitalization 11
--------------
4.4 Subsidiaries and Other Interests 12
--------------------------------
4.5 Corporate Records 12
-----------------
4.6 Conflicts; Consents of Third Parties 13
------------------------------------
4.7 Ownership and Transfer of Shares and LP Interests 13
-------------------------------------------------
4.8 Financial Statements 14
--------------------
4.9 No Undisclosed Liabilities 14
--------------------------
4.10 Absence of Certain Developments 14
-------------------------------
4.11 Taxes 16
-----
4.12 Real Property 18
-------------
4.13 Tangible Personal Property 20
--------------------------
<PAGE>
Section Page
------- ----
4.14 Intangible Property 20
-------------------
4.15 Material Contracts 21
------------------
4.16 Employee Benefits 22
-----------------
4.17 Labor 24
-----
4.18 Litigation 24
----------
4.19 Compliance with Laws 24
--------------------
4.20 Environmental Matters 25
---------------------
4.21 Insurance 26
---------
4.22 Payables 26
--------
4.23 Related Party Transactions 26
--------------------------
4.24 ADA Matters 26
-----------
4.25 Banks 27
-----
4.26 Consumer Loans; Louisiana Pay Day Loans 27
---------------------------------------
4.27 Financial Advisors 28
------------------
4.28 Capital Expenditures 28
--------------------
4.29 Name 28
----
4.30 Investment Intention 28
--------------------
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER AND DFG 28
5.1 Organization and Good Standing 28
------------------------------
5.2 Authorization of Agreement 29
--------------------------
5.3 Conflicts; Consents of Third Parties 29
------------------------------------
5.4 Litigation 30
----------
5.5 Investment Intention 30
--------------------
5.6 Financial Advisors 30
------------------
5.7 DFG Common Stock 30
----------------
ARTICLE VI
COVENANTS 30
6.1 Access to Information 30
---------------------
6.2 Conduct of the Business Pending the Closing 31
-------------------------------------------
6.3 Consents 34
--------
6.4 Consents to Real Property Leases;
---------------------------------
Releases of Personal Guarantees 34
-------------------------------
6.5 No Solicitation 34
---------------
6.6 Preservation of Records 35
-----------------------
6.7 Publicity 35
---------
6.8 Repayment of Loans; Turn Over of Funds 35
--------------------------------------
6.9 Use of Name 36
-----------
6.10 Non-Competition Agreements 36
--------------------------
6.11 Seller Releases 36
---------------
6.12 Employee Benefits and Employment 36
--------------------------------
6.13 Tax Matters 36
-----------
<PAGE>
Section Page
------- ----
ARTICLE VII
CONDITIONS TO CLOSING 39
7.1 Conditions Precedent to Obligations of Purchaser 39
------------------------------------------------
7.2 Conditions Precedent to Obligations of the Sellers 41
--------------------------------------------------
ARTICLE VIII
DOCUMENTS TO BE DELIVERED 42
8.1 Documents to be Delivered by the Sellers 42
----------------------------------------
8.2 Documents to be Delivered by the Purchaser and DFG 44
--------------------------------------------------
ARTICLE IX
INDEMNIFICATION 44
9.1 Survival 44
--------
9.2 General Indemnification 45
-----------------------
9.3 Limitations on Indemnification for Breaches of
----------------------------------------------
Representations and Warranties 49
------------------------------
9.4 Indemnification Procedures 49
--------------------------
9.5 Tax Matters 50
-----------
9.6 Employee Benefits and Labor Indemnity 51
-------------------------------------
9.7 Waiver of Subrogation and Other Rights 51
--------------------------------------
9.8 Right of Offset 52
---------------
9.9 Treatment of Payment 52
--------------------
ARTICLE X
MISCELLANEOUS 52
10.1 Certain Definitions 52
-------------------
10.2 Expenses 62
--------
10.3 Specific Performance 62
--------------------
10.4 Further Assurances 62
------------------
10.5 Arbitration 62
-----------
10.6 Entire Agreement; Amendments and Waivers
----------------------------------------
Confidentiality 63
---------------
10.7 Governing Law 63
-------------
10.8 Counterparts 63
------------
10.9 Table of Contents and Headings 63
------------------------------
10.10 Notices 63
-------
10.11 Severability 65
------------
10.12 Binding Effect; Assignment 65
--------------------------
10.13 Sellers' Representative 65
-----------------------
<PAGE>
SCHEDULES AND EXHIBITS
Schedule I - List of Stores
Schedule II - Shareholders
Schedule III - Limited Partners
Schedule 1.4(a) - Pre-Closing Allocation of Expenses
Schedule 1.5 - Incurred Capital Expenditures
Schedule 4.1 - Seller Information
Schedule 4.3(c) - Ownership of Partnership Interests in U.S. Check
Schedule 4.6 - Conflicts and Consents
Schedule 4.7 - Shareholder and Limited Partner Holdings
Schedule 4.9 - Undisclosed Liabilities
Schedule 4.10 - Certain Developments
Schedule 4.11 - Tax Matters
Schedule 4.12(a) - List of Company Properties
Schedule 4.13(a) - Personal Property Leases
Schedule 4.14 - Intangibles
Schedule 4.15 - Material Contracts
Schedule 4.16(a) - Employee Benefits
Schedule 4.16(c) - Loss of Status as a Qualified Plan
Schedule 4.16(h) - Conformity with Applicable ERISA Provisions
Schedule 4.16(j) - Acceleration of Employee Benefits
Schedule 4.18 - Litigation
Schedule 4.19 - License Revocation Proceedings
Schedule 4.20 - Environmental
Schedule 4.21 - Insurance
Schedule 4.23 - Related Party Transactions
Schedule 4.25 - Bank Accounts
Schedule 4.26 - Consumer Loans & Pre-Closing Estimate of
Consumer Loan Amount
Schedule 4.27 - Financial Advisors
Schedule 4.28 - Capital Expenditures; New Store Locations
Schedule 5.3 - Purchaser Conflicts/Consents
Schedule 6.4 - Personal Guaranties
Schedule 9.2(b) - Shareholders Allocation of Liability for Losses
Schedule 9.2(c) - Limited Partners Allocation of Liability for
Losses
Exhibit A - Form of Noncompetition Agreement
Exhibit B - Form of Amended and Restated Shareholders
Agreement
Exhibit C - Form of Legal Opinion (Sellers)
Exhibit D - Form of Legal Opinion (Purchaser)
Exhibit E - Form of Seller Release
Exhibit F - Form of DFG Holdings, Inc. Stock Purchase
Agreement
<PAGE>
PURCHASE AGREEMENT
------------------
THIS PURCHASE AGREEMENT, dated as of August 8, 1996 (the
"Agreement"), by and among Dollar Financial Group, Inc., a New York
corporation (the "Purchaser"), DFG Holdings, Inc., a Delaware
corporation ("DFG"), Any Kind Check Cashing Centers, Inc., an Arizona
corporation ("Any Kind"), the persons listed on Schedule II
(individually, a "Shareholder" and collectively, the "Shareholders"),
U.S. Check Exchange Limited Partnership, an Arizona limited
partnership ("U.S. Check"), the persons listed on Schedule III
(individually, a "Limited Partner" and collectively, the "Limited
Partners") and George H. Brimhall, individually and as the Sellers'
Representative.
W I T N E S S E T H:
--------------------
WHEREAS, Any Kind and U.S. Check (each, a "Company" and
collectively, the "Companies") presently own and operate check cashing
stores located in the states of Arizona, California, the District of
Columbia, Hawaii, Louisiana, Maryland, Pennsylvania and Texas; all of
which are listed on Schedule I (collectively, the "Stores"), which
Schedule identifies as to each Store the Company by which it is owned;
WHEREAS, the Shareholders own an aggregate of 100,000 shares
of common stock, par value $0.25 per share, of Any Kind (the
"Shares"), which Shares constitute all of the issued and outstanding
shares of capital stock of Any Kind;
WHEREAS, Any Kind is the sole general partner, and the
Limited Partners are all the limited partners, of U.S Check;
WHEREAS, Purchaser is a wholly-owned subsidiary of DFG;
WHEREAS, DFG is entering into this Agreement in order to
cause Purchaser to fulfill its obligations hereunder;
WHEREAS, (i) Purchaser desires to purchase from the
Shareholders, and the Shareholders desire to sell to Purchaser, the
Shares and (ii) Purchaser desires to purchase from the Limited
Partners, and the Limited Partners desires to sell to Purchaser, the
LP Interests (as defined in Section 10.1) held by such Limited
Partner, for the purchase price and upon the terms and conditions
hereinafter set forth;
<PAGE>
WHEREAS, the Purchaser desires to become a substitute
limited partner in U.S. Check;
WHEREAS, Purchaser desires that, effective upon the Closing
Date, each of the Shareholders and the Limited Partners will agree not
to compete with Purchaser or any of its affiliates pursuant to
separate Noncompetition Agreements to be entered into on the Closing
Date in substantially the form set forth on Exhibit A hereto;
WHEREAS, certain of the Shareholders and Limited Partners
are entering into the DFG Purchase Agreement and the Shareholders
Agreement; and
WHEREAS, certain terms used in this Agreement are defined in
Section 10.1;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements hereinafter contained, the parties
hereby agree as follows:
ARTICLE I
SALE AND PURCHASE OF SHARES AND LP INTERESTS
1.1 Sale and Purchase of Shares and LP Interests. Upon
--------------------------------------------
the terms and subject to the conditions contained herein, on the
Closing Date (i) the Shareholders shall sell, assign, transfer, convey
and deliver to the Purchaser good and marketable title, free and clear
of all Liens (except for Securities Act and state blue sky law
restrictions on the resale and distribution of the Shares) and DFG
shall cause the Purchaser to purchase from the Shareholders, the
Shares, and (ii) the Limited Partners shall sell, assign, transfer,
convey and deliver to the Purchaser good and marketable title, free
and clear of all Liens (except for Securities Act and state blue sky
law restrictions or the resale and distribution of the LP Interests)
and DFG shall cause the Purchaser to purchase from the Limited
Partners, the LP Interests.
In addition, each of the Sellers agrees to provide, or cause
to be provided, to Purchaser, Any Kind and U.S. Check access to all
documents and/or information as may be reasonably necessary to enable
each of them to see to the efficient and proper conduct and
administration of the assets owned by U.S. Check (the "U.S. Check
Assets") and to enable Any Kind to see to the efficient and proper
conduct and administration of the assets owned by Any Kind (the "Any
Kind Assets" and, collectively with the U.S. Check Assets, the
"Assets") from and after the Closing Date, including,
<PAGE>
without limitation, all historical files, Tax Returns, records and
personnel data.
1.2 Assets. Without limiting the foregoing, the Sellers
------
agree that, as a condition to Closing (as hereinafter defined), all of
the properties, business, rights, good-will and assets of Any Kind and
U.S. Check (including all properties, business, rights, good-will and
assets used or useable in the operation of the Stores), other than the
Excluded Assets, including, but not limited to, the following, shall
be owned by the Companies, free and clear of all Liens except for the
(i) Permitted Exceptions, and (ii) Liens expressly consented to by
Purchaser in writing:
(a) Licenses and Authorizations. All authorizations,
---------------------------
approvals, orders, licenses, franchises, certificates and permits
(collectively, "Licenses") of and from all Governmental Bodies
necessary to own or lease the properties and assets used or useable in
the operation of either Company, together with any renewals,
extensions or modifications thereof and additions thereto and other
pending applications or applications to be filed with any Governmental
Body between the date of this Agreement and the Closing Date.
(b) Personal Property, etc. All tangible and intangible
-----------------------
personal property, equipment, machinery, furniture, fixtures, tools,
computer hardware, supplies and other assets, wherever located, used
or useable in the operation of either Company, together with such
additions, modifications and replacements thereto, and subject to
deletions therefrom in connection with any such replacements, as may
be made in accordance with the terms of this Agreement and in the
ordinary course of business between the date of this Agreement and the
Closing Date.
(c) Real Property. All leased real property, buildings
-------------
and structures, leasehold improvements, fixtures and appurtenances
used or useable in the operation of either Company and each Company's
interests and rights arising under all agreements, rights and
appurtenances relating thereto (including all Real Property Leases),
any renewals, extensions, amendments or modifications thereof, and any
additional agreements and leases made or entered into in accordance
with the terms of this Agreement and in the ordinary course of
business between the date of this Agreement and the Closing Date.
(d) Leases and Agreements. All leases, commitments,
---------------------
orders, contracts and agreements to which either Company is a party,
including any renewals, extensions, amendments or modifications
thereof, and any additional agreements, leases,
<PAGE>
contracts, commitments and orders made or entered into in accordance
with the terms of this Agreement and in the ordinary course of
business between the date of this Agreement and the Closing Date.
(e) Intellectual Property, etc. All copyrights,
---------------------------
trademarks, service marks, trade secret rights, computer programs and
software, permits, licenses or other similar rights used or useable in
the operation of either Company, including, specifically, the
tradenames enumerated on Schedule 4.14 hereof, as well as all other
copyrights, trademarks, service marks, trade secret rights, computer
programs and software, permits, licenses or other similar rights
utilized in the operation of either Company, together with any
additions or modifications thereto and subject to any deletions
therefrom made in accordance with the terms of this Agreement and in
the ordinary course of business between the date of this Agreement and
the Closing Date.
(f) Books and Records. All books, records and files
-----------------
pertaining to the business conducted by either Company for all periods
ending on or before the Closing Date, including, in the case of Any
Kind, such Company's minute books and stock register.
(g) Prepaid Expenses. All security deposits and other
----------------
prepaid expenses of each Company existing as of the Closing Date.
(h) Customer Lists. All customer lists, vendor lists and
--------------
other intangible assets of each Company.
(i) Cash On Hand. All Cash on Hand.
------------
(j) Consumer Loans. All Consumer Loans.
--------------
(k) General Partnership Interest. The general partnership
----------------------------
interest in U.S. Check held by Any Kind.
(l) Louisiana Pay Day Loans. All Louisiana Pay Day Loans.
-----------------------
The term "computer programs and software" as used in subparagraph
(e) above shall include, without limitation, all point-of-sale ("POS")
software developed and/or owned by the Companies.
1.3 Excluded Assets. It is agreed that (a) the Excluded
---------------
Pay Day Loans, (b) any cash (other than Cash on Hand), savings
accounts, checks returned unpaid, accounts receivable (other than the
Consumer Loans and Louisiana Pay Day Loans), notes receivable (other
than the Consumer Loans and Louisiana Pay Day Loans), refunds of
unearned insurance premiums, bank deposits and
<PAGE>
items in the process of collection (other than the Consumer Loans and
Louisiana Pay Day Loans) held by either Company, (c) the current
claims and litigation relating to any of the Rawle Entities or
Lightning Tax in Virginia, Maryland, Utah and California and (d) each
of the bank accounts described on Schedule 4.25 (collectively, the
"Excluded Assets") shall not constitute part of the Assets. The
Excluded Assets shall be transferred by Any Kind and U.S. Check to the
Shareholders and the Limited Partners, respectively, prior to Closing,
in a manner reasonably satisfactory to Purchaser, the Shareholders and
the Limited Partners. Solely as an accommodation to the Sellers,
Purchaser will, during the 45-day period following the Closing Date,
use reasonable efforts to collect (at the sole cost and expense of the
Sellers) each Company's Excluded Assets constituting outstanding
accounts receivable and other items in the process of collection
(other than the Consumer Loans) as of the Closing Date (the
"Collectible Amounts") and will remit to the Sellers' Representative
any amounts so collected (net of expenses incurred by Purchaser,
including reasonable attorneys' fees; provided, however, that
-------- -------
Purchaser shall not incur any attorneys' fees in collecting the
Collectible Amounts without first receiving the written consent of the
Shareholders or the Limited Partners, as the case may be); provided,
--------
further, that (i) the Shareholders or the Limited Partners, as the
-------
case may be, shall promptly pay to Purchaser (or Purchaser may retain
from such proceeds) an amount equal to 10% of all amounts collected,
(ii) Purchaser shall not be obligated to institute litigation or any
proceedings to collect such amounts and (iii) the Sellers shall
reimburse Purchaser immediately upon demand for any and all expenses
of Purchaser (including, without limitation, reasonable attorneys'
fees and expenses incurred with the written consent of the
Shareholders or the Limited Partners, as the case may be) to the
extent Purchaser shall not therefore have reimbursed itself out of
amounts collected by Purchaser as described above. Following the 45-
day period described in the immediately preceding sentence, Purchaser
will reasonably cooperate (at the sole cost and expense of the
Sellers) with attempts made by the Sellers to collect any Collectible
Amounts which remain outstanding.
1.4 Apportionments. (a) Rents, additional rent, real
--------------
estate taxes, personal property taxes, water, utilities, and wages and
other employee benefits (including accrued vacation and holidays),
supplies and other types of assets described on 1.4(a)(i) (the
"Expenses") that are (i) paid by, or on behalf of, either Company on
or prior to the Closing Date and allocable, in whole or in part, to
any period following the Closing Date, shall be credited to the
Shareholders and the Limited Partners, as the case may be, to the
extent so allocable, or (ii) unpaid on or prior to the Closing Date
and allocable, in whole or in part, to any period prior to the Closing
Date, shall be credited to
<PAGE>
Purchaser. In addition, to the extent that, in connection with any
real property leases that continue to be held by Any Kind or U.S.
Check after the Closing, security deposits paid thereunder by either
of the Companies (the "Reimbursable Security Deposits") are to remain
in place on and after the Closing and Purchaser shall reimburse the
Sellers' Representative for such amounts at Closing, which
reimbursements shall be an adjustment to the Purchase Price.
(b) Schedule 1.4(a) sets forth the parties'
apportionment of the Expenses (the "Pre-Closing Allocation of
Expenses") and corresponding adjustments to the Purchase Price to the
extent practicable as of the date of Schedule 1.4(a). However,
because a number of the Expenses will not be readily determinable
until after the Closing Date, final apportionments cannot be made as
of the Closing Date. Therefore, the final apportionment of the
Expenses will be effected pursuant to Section 2.6 hereof.
1.5 Capital Expenditures. At the Closing and as an
--------------------
element of the aggregate Purchase Price, Purchaser shall pay to the
Sellers' Representative an amount equal to the amount of the Capital
Expenditures made by Any Kind or U.S. Check, as applicable, which were
made in respect of new store build outs and opening and operating
expenses for stores opened after January 1, 1996 for stores opened
after January 1, 1996, but only to the extent that Purchaser shall
have received evidence satisfactory to it that either Any Kind or U.S.
Check has actually incurred such capital expenditures ("Incurred
Capital Expenditures"). Schedule 1.5 sets forth the parties' estimate
of the Incurred Capital Expenditures as of the date of such Schedule
1.5. The final amount of the Incurred Capital Expenditures will be
established and the Purchase Price adjusted pursuant to Section 2.6
hereof.
ARTICLE II
PURCHASE PRICE AND PAYMENT
2.1 Amount of Purchase Price. The purchase price for the
------------------------
Shares and the LP Interests (the "Purchase Price") shall be an amount
equal to the sum of (i) $31,000,000 in cash, (ii) the Cash on Hand as
certified pursuant to the provisions of Section 2.4 below, (iii) the
Incurred Capital Expenditures, (iv) the Reimbursable Security
Deposits, (v) the Consumer Loan Amount, (vi) the amount of the
allocations of the Expenses provided for in Section 1.4 (vii) the
estimated Louisiana Pay Day Loan Amount set forth in Section 4.26(c)
and (viii) the Western Union Amount. The Purchase Price is subject to
adjustment as provided in this Agreement.
<PAGE>
2.2 Payments of Cash. (a) On the Closing Date, the
----------------
Purchaser shall pay to the Sellers' Representative, an amount equal to
the sum of (i) $29,000,000, (ii) the Cash on Hand, (iii) the amount of
the Incurred Capital Expenditures set forth on Schedule 1.5, (iv)
Reimbursable Security Deposits, (v) the aggregate Consumer Loan Amount
for each Consumer Loan set forth on Schedule 4.26, (vi) the Pre-
Closing Allocation of Expenses, (vii) the estimated Louisiana Pay Day
Loan Amount set forth in Section 4.26(c) and (viii) the Western Union
Amount, in cash by the delivery to the Sellers' Representative of a
certified or bank cashier's check in New York Clearing House Funds,
payable to the order of the Sellers' Representative (or, at the
Sellers' Representative's option, by wire transfer of immediately
available funds into an account designated, prior to the Closing, by
the Sellers' Representative).
(b) On the Closing Date, the Sellers hereby authorize
and direct the Purchaser to pay DFG, for the account and on behalf of
the DFG Stock Purchaser, an amount equal to $2,000,000 (constituting a
portion of the Purchase Price) as consideration for the purchase by
such DFG Stock Purchaser of 1,250 shares of DFG Common Stock pursuant
to the DFG Purchase Agreement.
2.3 Issuance of DFG Common Stock. On the Closing Date,
----------------------------
DFG shall issue to the DFG Stock Purchaser 1,250 shares of DFG Common
Stock pursuant to the terms of the DFG Purchase Agreement.
2.4 Certification of Amount of Cash on Hand. On the
---------------------------------------
Closing Date, the Sellers shall (i) determine the amount of (x)
Foreign Cash on Hand, and (y) U.S. Cash on Hand as of the opening of
business on the Closing Date at each of the Stores, (ii) deliver a
statement containing such determination to the Purchaser and (iii) in
cooperation with the Purchaser, calculate the value of the Foreign
Cash on Hand in U.S. Currency (the "U.S. Currency Equivalent") based
upon the spot price as published in The Wall Street Journal on such
date or, if not published on such date, on the next preceding date on
which it was published. The Sellers shall determine the U.S. Cash on
Hand and Foreign Cash on Hand by having two employees at each Store
count all U.S. Cash on Hand and Foreign Cash on Hand as of the opening
of business at such Store on the Closing Date and transmit such total
to an officer of Any Kind. Such officer will tally all such amounts
and deliver the statement referred to in clause (ii) above.
2.5 Ralph's Kiosk Contract. The Sellers' Representative
----------------------
shall have the right until December 31, 1996 to enter into
negotiations and discussions with Ralph's Grocery Stores, Inc.
("Ralph's") regarding the terms and conditions
<PAGE>
pursuant to which the Purchaser or any of its Affiliates (including,
after the Closing, Any Kind and U.S. Check) (collectively, the
"Purchaser Parties") would develop, open and operate five or more
check cashing kiosks in Ralph's grocery store locations. The Sellers'
Representative will keep the Purchaser Parties apprised of the status
and terms of such negotiations and discussions and will afford the
Purchaser Parties the opportunity to attend meetings held between the
Sellers' Representative and Ralph's for the purpose of conducting
negotiations and discussion regarding any Proposed Kiosk Contract. In
the event the Sellers' Representative and Ralph's reach agreement on
such terms and conditions and are able to reduce such agreement to a
definitive written contract (a "Proposed Kiosk Contract"), the
Sellers' Representative may tender such Proposed Kiosk Contract to the
Purchaser Parties. The Purchaser Parties may, in the exercise of
their reasonable business judgment, accept or decline to enter into
such Proposed Kiosk Contract. In the event the Purchaser Parties
decline to enter into a Proposed Kiosk Contract, they shall specify
the terms or conditions of such Proposed Kiosk Contract which are not
acceptable to the Purchaser Parties and shall notify the Sellers'
Representative of the terms and conditions that would be acceptable to
them. In the event the Sellers' Representative is able to obtain such
modified terms and conditions, the Purchaser Parties shall be
obligated to enter into such modified proposal Kiosk. The Sellers'
Representative may, until December 31, 1996, tender to the Purchaser
Parties revised Proposed Kiosk Contracts, which may be accepted or
rejected by the Purchaser Parties. In the event any Purchaser Party
enters into any Proposed Kiosk Contract that has been tendered to them
on or before December 31, 1996 by the Sellers' Representative, the
Purchaser will pay promptly the Sellers' Representative, on behalf of
the Sellers, an amount equal to $500,000. The Purchaser Parties may
decline to enter into any Proposed Kiosk Contract in the exercise of
their reasonable business judgment with no liability or obligation
arising to any of the Sellers or the Sellers' Representative
hereunder. The Sellers' Representative's rights and the Purchaser
Parties' obligations under this Section 2.5 shall expire on January 1,
1997.
2.6 Post-Closing Adjustments. (a) Purchaser shall prepare
------------------------
and deliver to Sellers, as promptly as practicable after the Closing
Date, updated versions of: Schedule 1.4(a) (Allocation of Expenses)
which shall be a final allocation of the Expenses in accordance with
Section 1.4, Schedule 1.5 (Incurred Capital Expenditures) which shall
be a listing of all Incurred Capital Expenditures and Schedule 4.26
(Consumer Loans and Louisiana Pay Day Loans) which shall list all
Consumer Loans and Louisiana Pay Day Loans which were outstanding and
owned by either Company on the Closing Date, the outstanding principal
balance thereof, the Consumer Loan Amount for each Consumer Loan on
such
<PAGE>
schedule as of the Closing Date and the Louisiana Pay Day Loan Amount
for each Louisiana Pay Day Loan on such schedule as of the Closing
Date (collectively, the "Updated Schedules") all of which shall be
dated as of the Closing Date. The representations and warranties
contained in this Agreement shall be deemed to have been made with
respect to all of the Consumer Loans and Louisiana Pay Day Loans
reflected on the Updated Schedule 4.26 on and as of the Closing Date.
(b) The Purchase Price shall be increased or decreased (i)
as provided in Section 1.4 with respect to Expenses, (ii) for any
increase or decrease in Incurred Capital Expenditures reflected on the
Updated Schedule 1.5 as compared to Schedule 1.5 attached to this
Agreement, (iii) for any increase or decrease in the principal amount
of any of the Consumer Loans reflected on the Updated Schedule 4.26 as
compared to the Schedule 4.26 attached to this Agreement; provided
--------
that if any of the Consumer Loans listed on Schedule 4.26 attached to
this Agreement are not owned by either Company as of the Closing Date
or have been repaid in full or have been written off to a zero loan
balance by either Company, such Consumer Loan shall not be reflected
on the Updated Schedule 4.26 and the Purchase Price shall be adjusted
down in an amount equal to the Consumer Loan Amount for all such
Consumer Loans and (iv) for any increase or decrease in the Louisiana
Pay Day Loan Amount reflected on such Updated Schedule 4.26 as
compared to the estimated Louisiana Pay Day Loan Amount in Section
4.26 (c) (the adjustments made pursuant to clauses (i) through (iv),
the "Adjustment Amount").
(c) As soon as is reasonably practicable following the
preparation and delivery of the Updated Schedules, Purchaser shall
prepare and deliver to the Sellers' Representative the Closing
Statement which shall set forth the adjustments to the Purchase Price
to be made, if any, in accordance with this Agreement. Concurrently
with its delivery of the Closing Statement to the Sellers'
Representative, Purchaser shall cause reasonable access to be granted
to the Sellers' Representative to the work papers, schedules and other
documents prepared or used by Purchaser and its accountants in
connection with the preparation of the Closing Statement.
(d) To the extent the Adjustment Amount results in an
increase of the Purchase Price, Purchaser shall promptly pay the
amount of such increase to the Sellers' Representative. To the extent
the Adjustment Amount results in a decrease to the Purchase Price, the
Sellers in each case, on a several, not joint, basis shall promptly
pay the full amount of such decrease to Purchaser; provided, however,
-------- -------
Brimhall shall be obligated to pay the full amount of any such
decrease to the Purchaser. Any amounts paid
<PAGE>
pursuant to this Section 2.6 shall be an adjustment to the Purchase
Price.
(e) In the event that the Sellers' Representative gives
Purchaser written notice within 15 days after delivery to the Sellers'
Representative of the Closing Statement that the Sellers'
Representative disputes any portion of the Closing Statement (a
"Dispute Notice") and such dispute is not resolved within 20 days
after delivery of such Dispute Notice to Purchaser, either Sellers'
Representative or Purchaser may submit such dispute to arbitration in
Maricopa County, Arizona for final resolution in accordance with the
commercial arbitration rules of the American Arbitration Association
then in effect. The determination of such arbitrators shall be final
and binding upon the parties hereto, and the fees of such arbitrators
in connection with the determination shall be paid by the party
against whom the award was made, or if a compromise was made, shared
equally. Any portion of the Closing Statement not subject to a
Dispute Notice shall become binding and final upon the parties on the
16th day after delivery of the Closing Statement to the Sellers'
Representative.
ARTICLE III
CLOSING AND TERMINATION
3.1 Closing Date. Subject to the satisfaction of the
------------
conditions set forth in Sections 7.1 and 7.2 hereof (or the waiver
thereof by the party entitled to waive that condition), the closing of
the sale and purchase of the Shares and the LP Interests provided for
in Section 1.1 hereof (the "Closing") shall take place at 10:00 A.M.
at the offices of Prindle, Decker & Amaro located at 310 Golden Shore,
Fourth Floor, Long Beach, California 90802-4246 (or at such other
place as the parties may designate in writing) on a Business Day to be
agreed by the parties which Business Day is no more than seven
Business Days after the satisfaction of the conditions precedent set
forth in Sections 7.1(m) and 7.2(i) below, or on such other date and
at such other place as the Sellers' Representative and the Purchaser
may jointly designate in writing. The date on which the Closing shall
be held is referred to in this Agreement as the "Closing Date."
3.2 Termination of Agreement. This Agreement may be
------------------------
terminated prior to the Closing as follows:
(a)At the election of either the Sellers' Representative or the
Purchaser on or after August 16, 1996, if the Closing shall not have
occurred by the close of business on such date, provided that the
terminating party is not in breach of this Agreement or
<PAGE>
otherwise in default of any of its obligations hereunder; provided,
--------
however, that if the sole reason that the Closing shall not have
-------
occurred by such date is that the condition set forth in Section
7.1(m) hereof shall not have been satisfied, and, as of such date, the
Minimum Lease Condition shall have been satisfied, then (i) the
Sellers shall have the right to deliver to Purchaser irrevocable
written notice under this Section 3.2(a) of their election to
consummate the transactions contemplated hereby and (ii) the Purchaser
shall have the right to deliver to Sellers irrevocable written notice
under this Section 3.2(a) of its election to consummate the
transactions contemplated hereby. Upon receipt of such a notice, the
recipient thereof shall be obligated to proceed with the Closing;
(b) by mutual written consent of the Sellers'
Representative and the Purchaser; or
(c) by the Sellers' Representative or the Purchaser if
there shall be in effect a final nonappealable Order of a Governmental
Body of competent jurisdiction restraining, enjoining or otherwise
prohibiting the consummation of the transactions contemplated hereby.
3.3 Procedure Upon Termination. In the event of
--------------------------
termination of this Agreement pursuant to Section 3.2 hereof, written
notice thereof shall forthwith be given by the terminating party to
the other party or parties, and this Agreement shall terminate, and
the purchase of the Shares and the LP Interests hereunder shall be
abandoned, without further action by the Purchaser or the Sellers. If
this Agreement is terminated as provided herein, each party shall
redeliver all documents, work papers and other material of any other
party relating to the transactions contemplated hereby, whether so
obtained before or after the execution hereof, to the party furnishing
the same.
3.4 Effect of Termination. In the event that this
---------------------
Agreement is validly terminated as provided herein, then the parties
shall be relieved of their duties and obligations arising under this
Agreement after the date of such termination and such termination
shall be without liability to the Purchaser, the Companies or any
Seller; provided, however, that the obligations of the parties set
-------- -------
forth in Section 10.2 hereof shall survive any such termination and
shall be enforceable hereunder; and provided, further, however, that
-------- ------- -------
nothing in this Section 3.4 shall relieve any party hereto of any
liability for a breach of this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
<PAGE>
Each of the Shareholders (other than Brimhall) hereby
jointly and severally represents and warrants to Purchaser as follows
(except to the extent that any such representation and warranty only
relates to U.S. Check), each of the Limited Partners hereby represents
and warrants to Purchaser as follows (except to the extent that any
such representation and warranty only relates to Any Kind), and
Brimhall hereby represents and warrants to Purchaser as follows:
4.1 Organization and Good Standing. Each Company, each
------------------------------
Shareholder and each Limited Partner (other than Shareholders and
Limited Partners that are natural persons) is a corporation,
partnership or trust duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization and
has all requisite corporate, partnership or trust power and authority
to own, lease and operate its properties and to carry on its business
as now conducted. Schedule 4.1 sets forth, for each Seller that is
not a natural person, the date of its formation, the jurisdiction
under which it was organized and, for each Seller which is a trust,
the name of all trustees of such trust. Each Company is duly
qualified or authorized to do business as a foreign corporation or
partnership and is in good standing under the laws of each
jurisdiction in which it owns or leases real property and each other
jurisdiction in which the conduct of its business or the ownership of
its properties requires such qualification or authorization, except
where the failure to so qualify would not have a material adverse
effect.
4.2 Authorization of Agreement. Each Seller and each
--------------------------
other party hereto (other than Purchaser or DFG) has all requisite
power, authority and legal capacity to execute and deliver this
Agreement, a Noncompetition Agreement substantially in the form of
Exhibit A hereto (collectively, the "Noncompetition Agreements") and
each other agreement, document, instrument or certificate contemplated
by this Agreement or to be executed by such Person in connection with
the consummation of the transactions contemplated by this Agreement
(together with this Agreement, the Seller Releases and the
Noncompetition Agreements, the "Seller Documents"), and to consummate
the transactions contemplated hereby and thereby. This Agreement has
been, and each of the Seller Documents will be at or prior to the
Closing, duly and validly executed and delivered by each Seller and
each other party thereto (other than Purchaser or DFG) and (assuming
the due authorization, execution and delivery by Purchaser and DFG, if
a party thereto) this Agreement constitutes, and each of the Seller
Documents when so executed and delivered will constitute, the legal,
valid and binding obligations of each Seller and each other party
thereto (other than Purchaser or DFG), enforceable against such Person
in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and
<PAGE>
similar laws affecting creditors' rights and remedies generally, and
subject, as to enforceability, to general principles of equity,
including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding
at law or in equity).
4.3 Capitalization.
--------------
(a) The authorized capital stock of Any Kind consists
solely of 1,000,000 shares of common stock, $0.25 par value per share
(the "Common Stock"). There are 100,000 shares of Common Stock issued
and outstanding and no shares of Common Stock are held by Any Kind as
treasury stock. The Shares constitute all of the issued and
outstanding shares of Common Stock and were duly authorized for
issuance and are validly issued, fully paid and non-assessable.
(b) There is no existing option, warrant, call, right,
commitment or other agreement of any character to which any
Shareholder or Any Kind is a party requiring, and there are no
securities of Any Kind outstanding which upon conversion or exchange
would require, the issuance, sale or transfer of any shares of capital
stock or other equity securities of Any Kind or other securities
convertible into, exchangeable for or evidencing the right to
subscribe for or purchase shares of capital stock or other equity
securities of Any Kind. None of the Shareholders or Any Kind is a
party to any voting trust or other voting agreement with respect to
any of the shares of Common Stock or to any agreement relating to the
issuance, sale, redemption, transfer or other disposition of the
capital stock of Any Kind.
(c) Schedule 4.3(c) sets forth a complete listing of
(i) each of the partners of U.S. Check, (ii) the percentage interest
in U.S. Check owned by each such partner, and (iii) the type of
partnership interest (general or limited) held by such partner. The
LP Interests to be transferred by the Limited Partners to Purchaser at
Closing constitute all of the partnership interests in U.S. Check,
other than the general partnership interest held by Any Kind. There
is no existing option, warrant, call, right, commitment or other
agreement of any character to which any Limited Partner, Any Kind or
U.S. Check is a party requiring, and there are no securities or
interests of U.S. Check outstanding which upon conversion or exchange
would require, the issuance, sale or transfer of any equity interests
of U.S. Check or other securities convertible into, exchangeable for
or evidencing the right to subscribe for or purchase equity interests
of U.S. Check. None of the Limited Partners, U.S. Check or Any Kind
is a party to any voting trust or other voting agreement with respect
to U.S. Check or to any agreement relating to the
<PAGE>
issuance, sale, redemption, transfer or other disposition of the
equity interests of U.S. Check.
(d) The Partnership Interests are not documented by
certificates or other documentary evidence.
4.4 Subsidiaries and Other Interests. Neither Company has
--------------------------------
any Subsidiaries nor does either Company own any equity interests in
any Person other than the 51% general partnership interest owned by
Any Kind in U.S. Check.
4.5 Corporate Records.
-----------------
(a) Any Kind, U.S. Check and the Sellers have delivered to
the Purchaser true, correct and complete copies of the certificate of
incorporation or certificate of limited partnership (each certified by
the Secretary of State or other appropriate official of the applicable
jurisdiction of organization) and by-laws or partnership agreement
(each certified by the secretary, assistant secretary or other
appropriate officer) or comparable organizational documents of each
Company.
(b) The minute books of Any Kind have been previously made
available to the Purchaser and contain, in all material respects,
complete and accurate records of all meetings and accurately reflect
all other corporate action of the stockholders and board of directors
(including committees thereof) of Any Kind. The stock certificate
books and stock transfer ledgers of Any Kind have been previously made
available to the Purchaser and are true, correct and complete. All
stock transfer taxes levied or payable with respect to all transfers
of shares of Any Kind prior to the date hereof have been paid and
appropriate transfer tax stamps affixed.
4.6 Conflicts; Consents of Third Parties. Except as set
------------------------------------
forth on Schedule 4.6, (a) none of the execution and delivery by any
Seller or any other party thereto (other than Purchaser or DFG) of
this Agreement and the Seller Documents, the consummation by each of
Seller and each other party thereto (other than Purchaser or DFG) of
the transactions contemplated hereby and thereby, or compliance by any
Seller or any other party thereto (other than Purchaser or DFG) with
any of the provisions hereof or thereof will (i) conflict with, or
result in the breach of, any provision of the certificate of
incorporation, by-laws, partnership agreement, trust agreement or
other organizational documents of any Seller or either Company;
(ii) conflict with, violate, result in the breach or termination of,
constitute a default under, or give rise to any right of acceleration
under, any note, bond, mortgage, deed of trust, document evidencing a
Consumer Loan, indenture, license, lease, agreement or other
<PAGE>
instrument or obligation to which any Seller or either Company is a
party or by which any of them or any of their respective properties or
assets is bound if such conflict, violation, breach, termination,
default or acceleration would have a material adverse effect on the
applicable Seller or Company; (iii) violate any material statute,
rule, regulation, judgment or Order of any Governmental Body by which
any Seller or either Company is bound; or (iv) result in the creation
of any Lien upon the properties or assets of either Company.
(b) No consent, waiver, approval, Order, Permit or
authorization of, or declaration or filing with, or notification to,
any Person or Governmental Body is required on the part of any Seller
or any other party hereto (other than the Purchaser or DFG) in
connection with the execution and delivery of this Agreement or the
Seller Documents, or the compliance by each Seller or any other party
hereto (other than the Purchaser or DFG), as the case may be, with any
of the provisions hereof or thereof.
4.7 Ownership and Transfer of Shares and LP Interests.
-------------------------------------------------
Each Seller is the record and beneficial owner of the Shares and the
LP Interests indicated as being owned by such Seller on Schedule 4.7,
free and clear of any and all Liens. Each Seller has the power and
authority to sell, transfer, assign and deliver such Shares and LP
Interests as provided in this Agreement, and such delivery will convey
to the Purchaser good and marketable title to such Shares and LP
Interests, free and clear of any and all Liens. Immediately after the
Closing, Purchaser will own all the equity interests in Any Kind and
all the partnership interests in U.S. Check (except for the general
partnership interest in U.S. Check which will be owned by Any Kind).
4.8 Financial Statements. Any Kind and the Sellers have
--------------------
delivered to the Purchaser copies of (i) the audited consolidated
balance sheets of each Company as at December 31, 1993, 1994 and 1995
and the related audited consolidated statements of income and of cash
flows of each Company for the years then ended and (ii) the unaudited
consolidated balance sheet of each Company as at April 30, 1996 and
the related consolidated statements of income and cash flows of each
Company for the period then ended (such audited and unaudited
statements, including the related notes and schedules thereto, are
referred to herein as the "Financial Statements"). Each of the
Financial Statements is complete and correct in all material respects,
has been prepared in accordance with GAAP (subject to normal year-end
adjustments in the case of the unaudited statements) and in conformity
with the practices consistently applied by such Company to which it
relates without modification of the accounting principles used in the
preparation thereof, and presents fairly in accordance with GAAP the
consolidated financial position, results of operations and
<PAGE>
cash flows of such Company as at the dates and for the periods
indicated.
For the purposes hereof, the audited consolidated balance
sheet of each Company as at December 31, 1995 is collectively referred
to as such Company's "Balance Sheet" and December 31, 1995 is referred
to as the "Balance Sheet Date".
4.9 No Undisclosed Liabilities. Except as set forth on
--------------------------
Schedule 4.9, neither Company has any indebtedness, obligations or
liabilities of any kind (whether absolute, contingent or otherwise,
and whether due or to become due) which are not reflected on its
respective Balance Sheet other than such indebtedness, obligations or
liabilities (i) as were incurred in the ordinary and usual course of
business consistent with its past practices since the Balance Sheet
Date, (ii) existing pursuant to any contract or agreement disclosed on
Schedules 4.12(a), 4.13 or 4.15 (or any contract or agreement not
required to be disclosed thereon because such contract or agreement
was not of the type required to be disclosed thereon by such Sections)
or (iii) which will be repaid or discharged prior to the Closing.
4.10 Absence of Certain Developments. Except as expressly
-------------------------------
required by this Agreement or as set forth on Schedule 4.10, since the
Balance Sheet Date:
(a) there has not been any Material Adverse Change;
(b) there has not been any damage, destruction or loss,
whether or not covered by insurance, with respect to the property and
assets of either Company having a replacement cost of more than
$100,000 for all such losses;
(c) except as required by Section 1.3 with respect to the
Excluded Assets, there has not been any declaration, setting aside or
payment of any dividend or other distribution in respect of any shares
of capital stock or equity securities of either Company or any
repurchase, redemption or other acquisition by either Company of any
outstanding shares of capital stock or other securities of, or other
ownership interest in, either Company;
(d) neither Company has awarded or paid any bonuses to
employees of either Company with respect to the fiscal year ended
December 31, 1995, or entered into, or increased or agreed to increase
the compensation payable or to become payable by it or the coverage or
benefits available under, any employment agreement, deferred
compensation agreement, severance pay, termination pay, vacation pay,
company awards, salary continuation for disability, sick leave,
deferred compensation, bonus or other incentive compensation,
insurance, pension or other employee
<PAGE>
benefit plan, payment or arrangement made to, for or with either
Company's directors, officers, employees, agents or representatives
(other than in the ordinary course of business consistent with past
practice and that in the aggregate have not resulted in a material
increase in the benefits or compensation expense of the Companies
taken as a whole);
(e) there has not been any change by either Company in
accounting or Tax reporting principles, methods or policies;
(f) neither Company has entered into any transaction or
Contract or conducted its business other than in the ordinary course
consistent with past practice;
(g) neither Company has failed to promptly pay and
discharge current liabilities except where disputed in good faith by
appropriate proceedings;
(h) neither Company has made any loans, advances or
capital contributions to, or investments in, any Person or paid any
fees or expenses to any Seller or any Affiliate of any Seller;
(i) neither Company has mortgaged, pledged or subjected to
any Lien any of its assets, or acquired any assets or sold, assigned,
transferred, conveyed, leased or otherwise disposed of any assets,
except for assets acquired or sold, assigned, transferred, conveyed,
leased or otherwise disposed of in the ordinary course of business
consistent with past practice;
(j) neither Company has discharged or satisfied any Lien,
or paid any obligation or liability (fixed or contingent), except in
the ordinary course of business consistent with past practice and
which, in the aggregate, would not be material to the Companies taken
as a whole;
(k) neither Company has canceled or compromised any debt
or claim or amended, canceled, terminated, relinquished, waived or re-
leased any Contract or right except in the ordinary course of business
consistent with past practice and which, in the aggregate, would not
be material to the Companies taken as a whole;
(l) neither Company has committed to make any capital
expenditures or capital additions or betterments in excess of $10,000
individually or $25,000 in the aggregate;
(m) neither Company has entered into any transaction,
arrangement or agreement with a Seller or any of its or any Seller's
Affiliates (including, without limitation, Brimhall or any of his
Affiliates);
<PAGE>
(n) neither Company has instituted or settled any material
Legal Proceeding; and
(o) none of the Sellers or any of the Companies has agreed
to take any of the actions set forth in this Section 4.10.
4.11 Taxes.
-----
(a) All Tax Returns required to be filed by or with
respect to each Company or their respective assets have been properly
prepared and duly and timely filed with the appropriate taxing
authorities in all jurisdictions in which such Tax Returns are
required to be filed, and all such Tax Returns are true, complete and
correct in all material respects. Each Company has duly and timely
paid all Taxes that are due and payable or claimed or asserted by any
taxing authority to be due, from or with respect to it for periods
covered by such Tax Returns. With respect to any period for which Tax
Returns have not yet been filed, or for which Taxes are not due or
owing, each Company has made sufficient current accruals for such
Taxes and such accruals are reflected on the Financial Statements.
Each Company has made all required estimated Tax payments sufficient
to avoid any underpayment penalties.
(b) Each Company has duly and timely withheld from
employee salaries, wages and other compensation and has paid over to
the appropriate taxing authorities all amounts required to be so
withheld and paid over for all periods under all applicable laws.
(c) No waivers of statutes of limitation have been given
or requested with respect to any Company in connection with any Tax
Returns covering such Company with respect to any Taxes payable by it
and no power of attorney with respect to any Tax matter is currently
in force. No issue has been raised by any taxing authority in any
audit or examination of either Company which, by application of the
same or similar principles, could reasonably be expected to result in
a deficiency for any subsequent period (including periods subsequent
to the Closing Date). There are no outstanding agreements, waivers,
or arrangements extending the statutory period of limitation
applicable to any claim for, or the period for the collection or
assessment of, Taxes due from or with respect to each Company for any
taxable period. No closing agreement pursuant to Section 7121 of the
Code (or any predecessor provision) or any similar provision of any
state, local, or foreign law has been entered into by or with respect
to either Company.
(d) The Sellers have delivered or made available to the
Purchaser true and complete copies of each of (i) any audit
<PAGE>
reports issued by any taxing authority within the last three years
relating to the federal, state, local or foreign Taxes due from or
with respect to either Company, and (ii) all of the federal, state,
local and foreign Tax Returns, for each of the last three years filed
by either Company.
(e) All deficiencies asserted or assessments made as a
result of any examinations by the Internal Revenue Service or any
other taxing authority of the Tax Returns of or covering or including
either Company have been fully paid, and there are no other audits or
investigations by any taxing authority in progress, nor has either
Company received any notice from any taxing authority that it intends
to conduct such an audit or investigation.
(f) Neither Any Kind nor any other Person on behalf of Any
Kind has filed a consent pursuant to Section 341(f) of the Code or
agreed to have Section 341(f)(2) of the Code apply to any disposition
of a subsection (f) asset (as such term is defined in Section
341(f)(4) of the Code) owned by Any Kind. Neither Company has agreed
to or is required to make any adjustments pursuant to Section 481(a)
of the Code or any similar provision of state, local or foreign law by
reason of a change in accounting method initiated by such Company or
has any knowledge that the Internal Revenue Service has proposed any
such adjustment or change in accounting method, or has any application
pending with any taxing authority requesting permission for any
changes in accounting methods that relate to the business or
operations of such Company.
(g) No Seller is a foreign person within the meaning of
Section 1445 of the Code.
(h) Schedule 4.11 lists all material types of Taxes paid
and material types of Tax Returns filed by each Company. No claim has
been made by a taxing authority in a jurisdiction where either Company
does not file Tax Returns such that it is or may be subject to
taxation by that jurisdiction.
(i) No property owned on the Closing Date by any Company
will be required to be treated as being (i) owned by another Person
pursuant to the provisions of Section 168(f)(8) of the Internal
Revenue Code of 1954, as amended and in effect immediately prior to
the enactment of the Tax Reform Act of 1986 or (ii) tax-exempt use
property within the meaning of Section 168(h)(1) of the Code.
(j) Except for the leases described on Schedule 4.12 which
require one of the Companies to make tax payments relating soley to
the use or occupancy of the leased premises associated therewith,
neither Company is a party to any tax sharing or
<PAGE>
similar agreement or arrangement (whether or not written) pursuant to
which it will have any obligation to make any payments after the
Closing.
(k) The performance of the transactions contemplated by
this Agreement will not (either alone or upon the occurrence of any
additional or subsequent event) result in the any payment that would
constitute an "excess parachute payment" within the meaning of Section
280G of the Code.
(l) Any Kind is not subject to any private letter ruling
of the Internal Revenue Service or comparable rulings of other taxing
authorities.
(m) Except as set forth on Schedule 4.11, there are no
liens with respect to Taxes upon any of the assets of either Company.
(n) Schedule 4.11 sets forth all material Federal, state,
local and foreign Tax elections under the Code and other applicable
provisions of law that are in effect with respect to either Company.
(o) Neither Company has ever been a member of an
affiliated group of corporations filing a consolidated, combined or
unitary Tax Return.
(p) Since its formation, U.S. Check has been taxed as a
partnership for federal, state and local income tax purposes and not
as an association taxable as a corporation and no claim has been made
by the Internal Revenue Service or any other taxing authority that
U.S. Check is or may be an association taxable as a corporation.
4.12 Real Property.
-------------
(a) Schedule 4.12(a) sets forth a complete list of all
real property and interests in real property leased by any Company
(individually, a "Real Property Lease" and the real properties
specified in such leases being referred to herein individually as a
"Company Property" and collectively as the "Company Properties") as
lessee or lessor. The Company Properties constitute all interests in
real property currently used or currently held for use in connection
with the business of either Company and which are necessary for the
continued operation of the business of the Companies as their
businesses are currently conducted. To the best of Sellers' knowledge
the premises leased pursuant to the Real Property Leases comply with
all building, fire, zoning and other ordinances and regulations
applicable thereto. The Companies have paid all rent, additional rent
and/or other charges
<PAGE>
reserved and payable under each of the Real Property Leases to the
extent so payable as of the Closing Date. One of the Companies has a
valid and enforceable leasehold interest under each of the Real
Property Leases, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is
sought in a proceeding at law or in equity); neither Company has
caused an event of default or received any written notice of any
default or event that with notice or lapse of time, or both, would
constitute a default by such Company under any of the Real Property
Leases; and none of the landlords in respect of the Real Property
Leases has caused an event of default that with notice or lapse of
time, or both, would constitute a default by any one of such landlords
under any of the Real Property Leases. Each of the Company Properties
and each of the buildings, fixtures and improvements thereon is in
good operating condition and repair (subject to normal wear and tear).
With respect to each Company Property, there is no management
agreement, equipment lease, service contract or other contract or
agreement to which the Company is a party affecting such Company
Property (collectively, "Property Contracts") which (i) was not made
in the ordinary course of business, (ii) is not terminable upon 30
days' prior notice by the Company without payment of a premium or
penalty or (iii) requires payments in excess of an amount that, if
added to the monthly payment obligations of all other Property
Contracts in respect of such Company Property, would cause the
aggregate amount of all monthly payment obligations in respect of all
Property Contracts for such Company Property to exceed $1,000. Any
Kind and the Sellers have delivered to the Purchaser true, correct and
complete copies of the Real Property Leases, together with all
amendments, modifications or supplements, if any, thereto. The
Companies presently own and operate check cashing stores at the
locations set forth next to each Company Property on Schedule 4.12(a).
(b) The Companies have all certificates of occupancy and
Permits of any Governmental Body necessary or useful for the current
use and operation of each Company Property, and to the best of each
Seller's knowledge each Company has fully complied with all material
conditions of the Permits applicable to it. To the best of each
Seller's knowledge, no default or violation, or event that with the
lapse of time or giving of notice or both would become a default or
violation, has occurred in the due observance of any Permit.
(c) There does not exist any actual or, to the best
knowledge of Any Kind and the Sellers, threatened or contemplated
condemnation or eminent domain proceedings that affect any Company
Property or any part thereof, and none of Any Kind or any of the
<PAGE>
Sellers has received any notice, oral or written, of the intention of
any Governmental Body or other Person to take or use all or any part
thereof.
(d) None of the Sellers or the Companies has received any
written notice from any insurance company that has issued a policy
with respect to any Company Property requiring performance of any
structural or other repairs or alterations to such Company Property.
(e) Neither Company owns or holds, or is obligated under
or a party to, any option to purchase or acquire, right of first
refusal or other Contract right to purchase, acquire, sell, assign or
dispose of any real estate or any portion thereof or interest therein
(other than options to renew the Real Property Leases).
(f) Neither Company owns or holds any real property in
fee.
4.13 Tangible Personal Property.
--------------------------
(a) Schedule 4.13(a) sets forth all leases of personal
property ("Personal Property Leases") relating to personal property
used in the business of any of the Companies or to which any of the
Companies is a party or by which the properties or assets of any of
the Companies is bound. Any Kind and the Sellers have delivered or
otherwise made available to the Purchaser true, correct and complete
copies of the Personal Property Leases, together with all amendments,
modifications or supplements thereto.
(b) Each Company has a valid leasehold interest under each
of the Personal Property Leases under which it is a lessee, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally and
subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or
in equity), and there is no default under any Personal Property Lease
by either Company or, to the best knowledge of Any Kind or any of the
Sellers, by any other party thereto, and no event has occurred that
with the lapse of time or the giving of notice or both would
constitute a default thereunder.
(c) Each Company has good and marketable title to all of
the items of tangible personal property reflected in its respective
Balance Sheet (except as sold or disposed of subsequent to the date
thereof in the ordinary course of business consistent with past
practice), free and clear of any and all Liens other
<PAGE>
than the Permitted Exceptions or as set forth on Schedule 4.13(c).
All such items of tangible personal property which, individually or in
the aggregate, are material to the operation of the business of each
Company are in good condition and in a state of good maintenance and
repair (ordinary wear and tear excepted) and are suitable for the
purposes used.
(d) Each of the items of tangible personal property used
by either Company under the Personal Property Leases is in good
condition and repair (ordinary wear and tear excepted) and is suitable
for the purposes used.
4.14 Intangible Property. Schedule 4.14 contains a
-------------------
complete and correct list of each patent, trademark, trade name,
computer program, software, service mark, brand name, brand mark and
copyright owned or used by either Company as well as all registrations
thereof and pending applications therefor, and each license or other
agreement relating thereto. Except as set forth on Schedule 4.14,
each of the foregoing is owned by the party shown on such Schedule as
owning the same, free and clear of all Liens and is in good standing
and not the subject of any challenge. There have been no claims made
and none of the Sellers nor any of the Companies has received any
notice or otherwise knows or has reason to believe that any of the
foregoing is invalid or conflicts with the asserted rights of others.
Each Company possesses all patents, patent licenses, trade names,
trademarks, service marks, brand marks, brand names, copyrights, know-
how, formulae and other proprietary and trade rights necessary for the
conduct of its business as now conducted, not subject to any
restrictions and without any known conflict with the rights of others
and neither Company has forfeited or otherwise relinquished any such
patent, patent license, trade name, trademark, service mark, brand
mark, brand name, copyright, know-how, formulae or other proprietary
right necessary for the conduct of its business as conducted on the
date hereof. Neither Company is under any obligation to pay any
royalties or similar payments in connection with any license to any
Seller or any Affiliate thereof.
4.15 Material Contracts. Schedule 4.15 sets forth all of
------------------
the following Contracts to which either Company is a party or by which
it is bound (collectively, the "Material Contracts"): (i) Contracts
with any Shareholder, Limited Partner or any direct or indirect
shareholder, partner or equity holder of either Company (or any
Affiliates of any of the foregoing) or any current or former officer
or director of either Company; (ii) Contracts with any labor union or
association representing any employee of either Company; (iii)
Contracts pursuant to which any Person is required to purchase or sell
a stated portion of its requirements or output from or to another
Person; (iv) Contracts for the sale
<PAGE>
of any of the assets of either Company other than in the ordinary
course of business or for the grant to any Person of any preferential
rights to purchase any of its assets; (v) partnership or joint venture
agreements; (vi) Contracts containing covenants of either Company or
any of its Affiliates not to compete in any line of business or with
any Person in any geographical area or covenants of any other Person
not to compete with either Company in any line of business or in any
geographical area; (vii) Contracts relating to the acquisition by
either Company of any operating business or the capital stock of any
other Person; (viii) Contracts relating to the borrowing of money;
(ix) any other Contracts, other than Real Property Leases, which were
not entered into in the ordinary course consistent with past practice,
or which involve the expenditure of more than $20,000 in the aggregate
(per contract) or require performance by any party more than one year
from the date hereof; (x) Contracts involving an obligation to make a
Capital Expenditure; (xi) franchise or licensing agreements pursuant
to which either Company is a franchisor or licensor; and (xii) all
Consumer Loans. There have been made available to the Purchaser true
and complete copies of each of the Material Contracts. Except as set
forth on Schedule 4.15, each of the Material Contracts and other
agreements is in full force and effect and is the legal, valid and
binding obligation of each party thereto, enforceable against such
party in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity). Except as
set forth on Schedule 4.15, neither Company is in default in any
material respect under any Material Contracts, nor, to the knowledge
of any Seller or Any Kind, is any other party to any Material Contract
in default thereunder in any material respect. Upon the consummation
of the transactions contemplated hereby and subject to the terms and
conditions hereof, the Purchaser will be entitled to all of the
benefits due and owing to either Company under each of the Material
Contracts (accruing from and after the Closing).
4.16 Employee Benefits.
-----------------
(a) Schedule 4.16(a) sets forth a complete and correct
list of (i) all "employee benefit plans", as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and any other severance pay, vacation pay, company awards,
salary continuation for disability, sick leave, deferred compensation,
bonus or other incentive compensation, stock purchase arrangements or
policies, life insurance, scholarship or other employee benefit plan,
program or arrangement maintained by either Company or to which either
Company has any
<PAGE>
liability (contingent or otherwise) with respect to employees,
officers, directors or shareholders of either Company ("Employee
Benefit Plans"). Schedule 4.16(a) clearly identifies, in separate
categories, Employee Benefit Plans that are (i) subject to Section
4063 and 4064 of ERISA ("Multiple Employer Plans"), (ii) multiemployer
plans (as defined in Section 4001(a)(3) of ERISA) ("Multiemployer
Plans") or (iii) "benefit plans", within the meaning of Section
5000(b)(1) of the Code providing continuing benefits after the
termination of employment (other than as required by Section 4980B of
the Code or Part 6 of Title I of ERISA and at the former employee's or
his beneficiary's sole expense).
(b) Neither Company would have any withdrawal or other
liability (contingent or otherwise) under Title IV of ERISA with
respect to any Multiple Employer Plan or Multiemployer Plan if
Purchaser had not purchased the Shares from Seller on the Closing Date
in accordance with the terms of this Agreement.
(c) Each of the Employee Benefit Plans intended to qualify
under Section 401 of the Code ("Qualified Plans") so qualify and the
trusts maintained thereto are exempt from federal income taxation
under Section 501 of the Code, and, except as disclosed on Schedule
4.16(c), nothing has occurred with respect to the operation of any
such plan which could cause the loss of such qualification or
exemption or the imposition of any liability, penalty or tax under
ERISA or the Code.
(d) All contributions and premiums required by law or by
the terms of any Employee Benefit Plan or any agreement relating
thereto have been timely made (without regard to any waivers granted
with respect thereto).
(e) The benefit liabilities, as defined in Section
4001(a)(16) of ERISA, of each of the Employee Benefit Plans subject to
Title IV of ERISA using the actuarial assumptions set forth in the
most recent actuarial valuation with respect to such Plan do not
exceed the fair market value of the assets of such plan. The
liabilities of each Employee Benefit Plan that has been terminated or
otherwise wound up, have been fully discharged in full compliance with
applicable Law.
(f) True, correct and complete copies of the following
documents, with respect to each of the Employee Benefit Plans have
been delivered to the Purchaser (A) any plans and related trust
documents, and all amendments thereto, (B) the most recent Forms 5500
for the past two years and schedules thereto, (C) the most recent
financial statements and actuarial valuations for the past two years,
(D) the most recent Internal Revenue Service determination letter, (E)
the most recent summary plan
<PAGE>
descriptions (including letters or other documents updating such
descriptions) and (F) written descriptions of all non-written
agreements relating to the Employee Benefit Plans.
(g) There are no pending Legal Proceedings which have been
asserted or instituted against any of the Employee Benefit Plans, the
assets of any such plans or either Company, or the plan administrator
or any fiduciary of the Employee Benefit Plans with respect to the
operation of such plans (other than routine, uncontested benefit
claims), and, to the each Seller's knowledge, there are no facts or
circumstances which could form the basis for any such Legal
Proceeding.
(h) Each of the Employee Benefit Plans has been
maintained, in all material respects, in accordance with its terms and
all provisions of applicable Law. All amendments and actions required
to bring each of the Employee Benefit Plans into conformity in all
material respects with all of the applicable provisions of ERISA and
other applicable Laws have been made or taken except to the extent
that such amendments or actions are not required by law to be made or
taken until a date after the Closing Date and are disclosed on
Schedule 4.16(h).
(i) None of the Companies, the Sellers, or any ERISA
Affiliate or any organization to which any is a successor or parent
corporation, has divested any business or entity maintaining or
sponsoring a defined benefit pension plan having unfunded benefit
liabilities (within the meaning of Section 4001(a)(18) of ERISA) or
transferred any such plan to any person other than the Sellers or any
ERISA Affiliate during the five-year period ending on the Closing
Date.
(j) Except as disclosed on Schedule 4.16(j), neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any payment
becoming due to any employee of either Company; (ii) increase any
benefits otherwise payable under any Employee Benefit Plan; or (iii)
result in the acceleration of the time of payment or vesting of any
such benefits.
4.17 Labor.
-----
(a) Neither Company is party to any labor or collective
bargaining agreement and there are no labor or collective bargaining
agreements which pertain to employees of either Company.
(b) No employees of either Company are represented by any
labor organization. No labor organization or group of employees of
either Company has made a pending demand for
<PAGE>
recognition, and there are no representation proceedings or petitions
seeking a representation proceeding presently pending or, to the best
knowledge of Any Kind or any Seller, threatened to be brought or
filed, with the National Labor Relations Board or other labor
relations tribunal. There is no organizing activity involving either
Company pending or, to the best knowledge of Any Kind or any Seller,
threatened by any labor organization or group of employees of either
Company.
(c) There are no (i) strikes, work stoppages, slowdowns,
lockouts or arbitrations or (ii) material grievances or other labor
disputes pending or, to the best knowledge of Any Kind or any Seller,
threatened against or involving either Company. There are no unfair
labor practice charges, grievances or complaints pending or, to the
best knowledge of Any Kind or any Seller, threatened by or on behalf
of any employee or group of employees of either Company.
4.18 Litigation. Except as set forth in Schedule 4.18,
----------
there is no suit, action, proceeding, investigation, claim or order
pending or, to the knowledge of Any Kind or any Seller, overtly
threatened against either Company (or to the knowledge of Any Kind or
any Seller, pending or threatened, against any of the officers,
directors or key employees of either Company with respect to their
business activities on behalf of either Company), or to which any of
the Sellers or either Company is otherwise a party, before any court,
or before any governmental department, commission, board, agency, or
instrumentality; nor, to the knowledge of Any Kind or any Seller, is
there any reasonable basis for any such action, proceeding, or
investigation. Neither Company is subject to any judgment, Order or
decree of any court or Governmental Body and neither Company is
engaged in any legal action to recover monies due it or for damages
sustained by it.
4.19 Compliance with Laws. Each Company possesses all
--------------------
Licenses of and from all Governmental Bodies, and has made all filings
with all Governmental Bodies, necessary to own or lease its respective
properties and assets and to conduct the business(es) in which it is
engaged. Except as set forth on Schedule 4.19, no proceeding has been
threatened or commenced which seeks to, or could reasonably be
anticipated to, cause the suspension, modification, revocation or
withdrawal of any License held by either Company. Each Company is
currently, and at all times has been, in material compliance with all
Laws applicable to such Company and/or the businesses in which they
are engaged including, without limitation, all applicable credit,
banking and consumer protection Laws (such as, for example, the Truth
in Lending Act and its implementing Regulation Z, the Equal Credit
Opportunity Act and its implementing Regulation B, the Fair Credit
Reporting Act, the Federal Trade Commission Credit Practices Trade
<PAGE>
Regulation Rule and analogous provisions of state Law, Laws regulating
check cashing, collateral loan brokerage, small loans or other loans,
interest and usury and debt collection, plain language Laws and Laws
proscribing unfair and/or deceptive acts or practices) and franchise
disclosure Laws (such as, for example, 16 C.F.R. Sections 436 et seq. and
-- ---
analogous provisions of state Law). Neither Company nor any of their
directors, officers, employees or representatives has offered,
proposed, promised or made any illegal payment to officers, employees
or representatives of any Governmental Body, or engaged in any illegal
reciprocal practices or made any illegal payment or given any other
illegal consideration to any third party.
4.20 Environmental Matters. Except as set forth on
---------------------
Schedule 4.20 hereto:
(a) the operations of each Company have been and are in
compliance with all applicable material Environmental Laws and all
Licenses issued pursuant to applicable material Environmental Laws
("Environmental Permits");
(b) each Company has obtained all material Environmental
Permits necessary to operate its business and is in compliance with
such Environmental Permits;
(c) neither Company is the subject of any outstanding
written order, agreement or Contract with any governmental authority
or person respecting (i) applicable Environmental Laws, (ii) Remedial
Action, (iii) any Release or threatened Release of a Hazardous
Material or (iv) any Environmental Claim;
(d) neither Company has received any written communication
alleging that either Company or the operations thereof may be in
violation of any applicable Environmental Law or any Environmental
Permit, or may have any liability under any applicable Environmental
Law;
(e) to the best of each Seller's knowledge, neither
Company has any liability in connection with any Release of any
Hazardous Materials into the indoor or outdoor environment (whether
on-site or off-site) and, to the best of each Seller's knowledge, no
facts or circumstances exist which could reasonably be expected to
give rise to such liability under applicable Environmental Laws;
(f) there are no legal or administrative proceedings
pending or, to the knowledge of any of the Sellers or Any Kind,
threatened against the Company alleging the violation of or seeking to
impose liability pursuant to applicable Environmental Laws;
<PAGE>
(g) to the best of each Seller's knowledge, there are no
investigations of the business, operations, or currently or previously
owned, operated or leased property of either Company pending or, to
the knowledge of any of the Sellers or Any Kind, threatened which
could lead to the imposition of any liability pursuant to applicable
Environmental Law;
(h) to the best of each Seller's knowledge, there is not
located at any of the properties of either Company any (i) underground
storage tanks, (ii) asbestos-containing material or (iii) equipment
containing polychlorinated biphenyls; and
(i) Any Kind and the Sellers have provided to the
Purchaser copies of all environmentally related audits, studies,
reports, analyses, and results of investigations that have been
performed with respect to the currently or previously owned, leased or
operated properties of either Company.
4.21 Insurance. Schedule 4.21 sets forth a complete and
---------
accurate list of all policies of insurance of any kind or nature
covering either Company or any of their respective employees,
properties or assets, including, without limitation, policies of life,
disability, fire, theft, workers compensation, employee fidelity and
other casualty and liability insurance. All such policies are in full
force and effect and neither Company is in default of any provision
thereof.
4.22 Payables. All accounts payable of either Company
--------
reflected in their respective Balance Sheets or arising after the date
thereof are the result of bona fide transactions in the ordinary
course of business and have been paid or are not yet due and payable.
4.23 Related Party Transactions. Except as set forth on
--------------------------
Schedule 4.23, none of the Sellers or any Affiliate of any of the
Companies or any Seller has borrowed any monies from or has
outstanding any indebtedness or other similar obligations to either
Company. Except as set forth in Schedule 4.23, none of any Sellers,
any of the Companies, any Affiliate of either Company or any Seller or
any officer or employee of any of them (i) owns any direct or indirect
interest of any kind in, or controls or is a director, officer,
employee or partner of, or consultant to, or lender to or borrower
from or has the right to participate in the profits of, any Person
which is (A) a competitor, supplier, customer, landlord, tenant,
creditor or debtor of either Company, (B) engaged in a business
related to the business of either Company, or (C) a participant in any
transaction to which either Company is a party or (ii) is a party to
any Contract or transaction with either Company.
<PAGE>
4.24 ADA Matters. None of any Company or any of the
-----------
Shareholders or Limited Partners has received any notification, or is
aware of any circumstance, regarding any real property which is the
subject of any of the Real Property Leases which would require that
the lessee under any such Real Property Lease make any additions,
renovations or improvements to such property pursuant to the terms of
the Americans With Disabilities Act ("ADA") or otherwise.
4.25 Banks. Schedule 4.25 contains a complete and correct
-----
list of the names and locations of all banks in which either Company
has accounts or safe deposit boxes and the names of all persons
authorized to draw thereon or to have access thereto. Except as set
forth on Schedule 4.25, no person holds a power of attorney to act on
behalf of either Company.
4.26 Consumer Loans; Louisiana Pay Day Loans.
---------------------------------------
(a) Schedule 4.26 contains a complete and correct list of all
Consumer Loans as of the date such schedule was prepared together with
the outstanding principal balance and Consumer Loan Amount for each
Consumer Loan set forth thereon, in each case, as of the date such
schedule was prepared. Schedule 4.26 also contains the standard form
of the note and other loan documentation used by either Company to
evidence the Consumer Loans. Each of the Consumer Loans and Louisiana
Pay Day Loan is in full force and effect and is the legal, valid and
binding obligation of the obligor thereunder, enforceable against such
Person in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity). Except as
set forth on Schedule 4.26, to the knowledge of any Seller or Any
Kind, no obligor under any Consumer Loan or Louisiana Pay Day Loan is
in default thereunder in any material respect. Each Consumer Loan and
Louisiana Pay Day Loan was made in (i) the ordinary and usual course
of business and (ii) conformity to the credit policies and
underwriting standards, in each case, of the Company which made such
Consumer Loan or Louisiana Pay Day Loan. Each Company has in its
possession (A) a fully executed original note or post-dated check
representing each Consumer Loan or Louisiana Pay Day Loan owned by
such Company and (B) a fully executed original or a true, complete and
correct copy of all other documents relating to the Consumer Loan or
Louisiana Pay Day Loan represented by such note or post-dated check,
the rights and duties of the obligor under such Consumer Loan or
Louisiana Pay Day Loan, the operative terms and conditions of such
Consumer Loan or Louisiana Pay Day Loan, the rights and obligations of
any other Person relating to such Consumer Loan or Louisiana Pay Day
Loan and any collateral associated therewith) and all other documents
<PAGE>
necessary to enforce such Consumer Loan or Louisiana Pay Day Loan or
perfect the security interest thereunder.
(b) To the best of each Seller's knowledge (i) each of the
Companies is in compliance with all laws enacted by and all
regulations promulgated or issued by any Governmental Body pertaining
to usury, truth-in-lending, installment or conditional sales and sales
financing, and (ii) neither the billing and collection nor enforcement
of any Consumer Loan or Louisiana Pay Day Loan in accordance with the
express contractual terms thereof will result in the violation of any
Laws enacted by or regulations promulgated or issued by any
Governmental Body.
(c) As of the date hereof, the parties agree that $2,493
is the estimated Louisiana Pay Day Loan Amount.
4.27 Financial Advisors. Except as set forth on Schedule
------------------
4.27, no Person has acted, directly or indirectly, as a broker, finder
or financial advisor for any of the Sellers or any of the Companies in
connection with the transactions contemplated by this Agreement and no
Person is entitled to any fee or commission or like payment in respect
thereof.
4.28 Capital Expenditures. Schedule 4.28 contains, with
--------------------
respect to each of the Companies, a complete and correct list of all
Capital Expenditures (other than Incurred Capital Expenditures) that
(i) have been actually incurred by either of the Companies during the
period from the Balance Sheet Date through the date hereof or (ii) are
budgeted to be made by either Company during the period from the date
hereof through the Closing Date. Schedule 4.28 also lists all Stores
opened since the Balance Sheet Date and all locations which are
currently under development and/or construction to be operated by
either Company.
4.29 Name. "Any Kind", "Any Kind Check Cashing", "U.S.
----
Check" and "U.S. Check Exchange" are the only names used by Any Kind
or U.S. Check in the operation of the Stores.
4.30 Investment Intention. The DFG Stock Purchaser is
--------------------
acquiring the DFG Common Stock for its own account, for investment
purposes only and not with a view to the resale or distribution (as
such term is used in Section 2(11) of the Securities Act of 1933, as
amended (the "Securities Act") thereof. The DFG Stock Purchaser
understands that the shares of DFG Common Stock received by it will
not have been registered under the Securities Act and cannot be sold
unless subsequently registered under the Securities Act or an
exemption from such registration is available. The DFG Stock
Purchaser hereby acknowledges that the certificates delivered to it
evidencing its shares of DFG Common Stock shall be legended as
indicated in the previous sentence and as provided in
<PAGE>
the Shareholders Agreement. The DFG Stock Purchaser is an "accredited
investor" within the meaning of Rule 501(a) of Regulation D
promulgated under the Securities Act.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER AND DFG
The Purchaser and DFG hereby represent and warrant to the
Sellers that:
5.1 Organization and Good Standing. The Purchaser is a
------------------------------
corporation duly organized, validly existing and in good standing
under the laws of the State of New York. DFG is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware.
5.2 Authorization of Agreement. Each of the Purchaser and
--------------------------
DFG has full corporate power and authority to execute and deliver this
Agreement and each other agreement, document, instrument or
certificate contemplated by this Agreement or to be executed by the
Purchaser or DFG, as the case may be, in connection with the
consummation of the transactions contemplated hereby and thereby (the
"Purchaser Documents"), and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and
performance by each of the Purchaser and DFG of this Agreement and
each Purchaser Document have been duly authorized by all necessary
corporate action on behalf of the Purchaser and DFG. This Agreement
has been, and each Purchaser Document will be at or prior to the
Closing, duly executed and delivered by the Purchaser and DFG and
(assuming the due authorization, execution and delivery by the other
parties hereto and thereto) this Agreement constitutes, and each
Purchaser Document when so executed and delivered will constitute,
legal, valid and binding obligations of the Purchaser and DFG,
enforceable against each of them in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights and remedies
generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith
and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
5.3 Conflicts; Consents of Third Parties.
------------------------------------
(a) Except as set forth on Schedule 5.3 hereto, none of
the execution and delivery by the Purchaser and DFG of this Agreement
and of the Purchaser Documents, the consummation by the Purchaser and
DFG of the transactions contemplated hereby and
<PAGE>
thereby, or compliance by the Purchaser and DFG with any of the
provisions hereof or thereof will (i) conflict with, or result in the
breach of, any provision of the certificate of incorporation or by-
laws of the Purchaser or DFG, as the case may be, (ii) conflict with,
violate, result in the breach or termination of, constitute a default
under, or give rise to any right of acceleration under, any note,
bond, mortgage, indenture, license, agreement or other instrument or
obligation to which the Purchaser or DFG is a party or by which the
Purchaser or DFG or any of their respective properties or assets are
bound or (iii) violate any statute, rule, regulation, judgment or
Order of any Governmental Body by which the Purchaser or DFG is bound.
(b) Except as set forth on Schedule 5.3, no consent,
waiver, approval, Order, Permit or authorization of, or declaration or
filing with, or notification to, any Person or Governmental Body is
required on the part of the Purchaser or DFG in connection with the
execution and delivery of this Agreement or the Purchaser Documents or
the compliance by Purchaser or DFG with any of the provisions hereof
or thereof.
5.4 Litigation. There are no Legal Proceedings pending
----------
or, to the best knowledge of the Purchaser or DFG, threatened that are
reasonably likely to prohibit or restrain the ability of the Purchaser
or DFG to enter into this Agreement or consummate the transactions
contemplated hereby.
5.5 Investment Intention. The Purchaser is acquiring the
--------------------
Shares and LP Interests for its own account, for investment purposes
only and not with a view to the resale or distribution (as such term
is used in Section 2(11) of the Securities Act) thereof. Purchaser
understands that the Shares and LP Interests have not been registered
under the Securities Act and cannot be sold unless subsequently
registered under the Securities Act or an exemption from such
registration is available.
5.6 Financial Advisors. No Person, other than Beau
------------------
Jeffries, has acted, directly or indirectly, as a broker, finder or
financial advisor for the Purchaser or DFG in connection with the
transactions contemplated by this Agreement and, other than Beau
Jeffries, no person is entitled to any fee or commission or like
payment in respect thereof.
5.7 DFG Common Stock. The shares of DFG Common Stock to
----------------
be issued as a part of the Purchase Price will be validly issued,
fully paid and non-assessable, and such shares will be issued free and
clear of any and all Liens, except for (a) Securities Act restrictions
on the resale or distribution of such shares and state blue sky laws
and (b) restrictions contained in the Shareholders Agreement.
<PAGE>
ARTICLE VI
COVENANTS
6.1 Access to Information. (a) Any Kind and the Sellers
---------------------
agree that, prior to the Closing Date, the Purchaser shall be
entitled, through its officers, employees and representatives
(including, without limitation, its legal advisors and accountants),
to make such investigation of the properties, businesses and
operations of the Companies and such examination of the books, records
and financial condition of the Companies as it reasonably requests and
to make extracts and copies of such books and records. Any such
investigation and examination shall be conducted during regular
business hours and under reasonable circumstances, and Any Kind and
the Sellers shall cooperate, and shall cause the Companies to
cooperate, fully therein. In order that the Purchaser may have full
opportunity to make such physical, business, accounting and legal
review, examination or investigation as it may reasonably request of
the affairs of the Companies, Any Kind and the Sellers shall cause the
officers, employees, consultants, agents, accountants, attorneys and
other representatives of the Companies to cooperate fully with such
representatives in connection with such review and examination.
(b) The determination of the Foreign Cash on Hand to be
delivered by the Sellers to the Purchaser pursuant to Section 2.4
hereof shall be true and correct.
6.2 Conduct of the Business Pending the Closing.
-------------------------------------------
(a) Except as otherwise expressly contemplated by this
Agreement or with the prior written consent of the Purchaser (which
consent shall not be unreasonably withheld or delayed), each of the
Sellers covenant that each Company shall:
(i) conduct its businesses only in the ordinary course
consistent with past practice;
(ii) use its best efforts to (A) preserve its present
business operations, organization (including, without limitation,
management and the sales force) and goodwill and (B) preserve its
present relationship with Persons having business dealings with
it;
(iii) maintain (A) all of its assets and properties in
their current condition, ordinary wear and tear excepted and
(B) insurance upon all of its properties and assets in such
amounts and of such kinds comparable to that in effect on the
date of this Agreement;
<PAGE>
(iv) (A) maintain its books, accounts and records in the
ordinary course of business consistent with past practices,
(B) continue to collect accounts receivable and pay accounts
payable utilizing normal procedures and without discounting or
accelerating payment of such accounts except for such discounting
or accelerating as may be done in the ordinary course consistent
with past practice, and (C) comply with all contractual and other
obligations applicable to its operations;
(v) promptly pay and discharge all liabilities (including
liabilities for services rendered or goods delivered to either of
the Companies) that are due and payable by it prior to the
Closing Date except where such liabilities are being disputed in
good faith by appropriate proceedings; and
(vi) comply in all material respects with applicable Laws,
including, without limitation, Environmental Laws.
(b) Except as otherwise expressly contemplated by this
Agreement or with the prior written consent of the Purchaser (which
consent shall not be unreasonably withheld in the case of
subparagraphs (v), (vii), (viii) or (xii) below), the Sellers covenant
that they shall not permit either Company to:
(i) except as expressly provided in Section 1.3, declare,
set aside, make or pay any dividend or other distribution in
respect of the capital stock of either of the Companies or repur-
chase, redeem or otherwise acquire any outstanding shares of the
capital stock or other securities of, or other ownership
interests in, either Company;
(ii) transfer, issue, sell or dispose of any shares of
capital stock, partnership interests or other securities of
either Company or grant options, warrants, calls or other rights
to purchase or otherwise acquire shares of the capital stock,
partnership interests or other securities of either Company;
(iii) effect any recapitalization, reclassification, stock
split or like change in the capitalization of either Company;
(iv) amend the certificate of incorporation, by-laws,
certificate of limited partnership or partnership agreement of
either Company;
(v) (A) increase by 10% or more in the aggregate the
annual level of compensation of any employee of either
<PAGE>
Company whose annual compensation exceeds $25,000, (B) increase
the annual level of compensation payable or to become payable by
either Company to any of their respective executive officers, (C)
grant any bonus, benefit or other direct or indirect compensation
to any employee, director or consultant whose annual compensation
exceeds $25,000, other than in the ordinary course consistent
with past practice and in such amounts as are fully reserved
against in the Financial Statements, (D) increase the coverage or
benefits available under any (or create any new) severance pay,
termination pay, vacation pay, company awards, salary
continuation for disability, sick leave, deferred compensation,
bonus or other incentive compensation, insurance, pension or
other employee benefit plan or arrangement made to, for, or with
any of the directors, officers, employees, agents or representa-
tives of either Company or otherwise modify or amend or terminate
any such plan or arrangement or (E) enter into any employment,
deferred compensation, severance, consulting, non-competition or
similar agreement (or amend any such agreement) to which either
Company is a party or involving a director, officer or employee
of either Company in his or her capacity as a director, officer
or employee of either Company;
(vi) except for trade payables and for indebtedness for
borrowed money incurred in the ordinary course of business and
consistent with past practice, borrow monies for any reason or
draw down on any line of credit or debt obligation, or become the
guarantor, surety, endorser or otherwise liable for any debt,
obligation or liability (contingent or otherwise) of any other
Person;
(vii) subject to any Lien, any of the properties or assets
(whether tangible or intangible) of either Company;
(viii) acquire any material properties or assets or sell,
assign, transfer, convey, lease or otherwise dispose of any of
the material properties or assets (except for fair consideration
in the ordinary course of business consistent with past practice)
of either Company;
(ix) cancel or compromise any debt or claim or waive or
release any material right of either Company except in the
ordinary course of business consistent with past practice;
(x) enter into any commitment for Capital Expenditures,
except as provided in Schedule 4.28 hereto;
(xi) enter into, modify or terminate any labor or
collective bargaining agreement of either Company or, through
<PAGE>
negotiation or otherwise, make any commitment or incur any
liability to any labor organization with respect to either
Company;
(xii) introduce any material change with respect to the
operation of either Company, including any material change in the
types, nature, composition or quality of its products or services
or, other than in the ordinary course of business, make any
change in product specifications or prices or terms of
distributions of such products;
(xiii) become obligated to develop any new locations except
as provided on Schedule 4.28;
(xiv) enter into or agree to enter into any merger or
consolidation with any Person or engage in any new business or
invest in, make a loan, advance or capital contribution to, or
otherwise acquire the securities of, any other Person;
(xv) except for transfers of cash pursuant to normal cash
management practices, make any investments in or loans to, or pay
any fees or expenses to, or enter into or modify any Contract
with, any Seller or any shareholder, partner or Affiliate of any
Seller;
(xvi) restructure, change, modify or renegotiate the terms
of any obligation of either Company to another Person which
restructuring, change, modification or renegotiation has the
effect of extending, delaying or deferring the time for payment
or performance of any such obligation, other than in the ordinary
course of business consistent with past practice;
(xvii) modify its credit eligibility policies, underwriting
standards, reserve practices or standard form documentation
relating to any Consumer Loans;
(xviii) agree to do anything prohibited by this Section 6.2
or take or omit to take any action which would make any of the
representations and warranties of the Sellers in this Agreement
or the Seller Documents untrue or incorrect in any material
respect as of any time through and including the Closing Date; or
(xix) make any material Tax election or settle or
compromise any Tax liability for an amount materially in excess
of the liability therefor that is reflected on the Financial
Statements of either Company, as the case may be.
<PAGE>
6.3 Consents. Except to the extent provided in Section
--------
6.4 hereof, Any Kind, U.S. Check and the Sellers shall use their best
efforts, and the Purchaser and DFG shall cooperate with Any Kind, U.S.
Check and the Sellers, to obtain at the earliest practicable date all
consents, waivers, approvals, Orders, Permits and authorizations of
any Person or Governmental Body required to be obtained by Any Kind or
U.S. Check to consummate the transactions contemplated by this
Agreement, including, without limitation, the consents, waivers,
approvals, Orders, Permits and authorizations of any Person or
Governmental Body referred to in Section 4.6(b) hereof.
6.4 Consents to Real Property Leases; Releases of Personal
------------------------------------------------------
Guarantees. Any Kind, U.S. Check and the Sellers, Purchaser and DFG
----------
will jointly cooperate and use commercially reasonable efforts to
(i) obtain all consents and estoppels from landlords and lessors which
are required to be obtained to consummate the transactions
contemplated by this Agreement pursuant to the terms of any of the
Real Property Leases, and (ii) obtain releases of the guarantees that
are listed on Schedule 6.4 hereto and which were made by any of the
Shareholders.
6.5 No Solicitation. Neither Any Kind nor the Sellers
---------------
will, nor will they cause or permit either Company or any of either
Company's directors, officers, employees, representatives or agents
(collectively, the "Representatives") to, directly or indirectly,
(i) discuss, negotiate, undertake, authorize, recommend, propose or
enter into, either as the proposed surviving, merged, acquiring or
acquired corporation, any transaction involving a merger,
consolidation, business combination, purchase or disposition of any
capital stock or other equity interest in, or material assets of,
either Company other than the transactions set forth in this Agreement
(an "Acquisition Transaction"), (ii) facilitate, encourage, solicit or
initiate discussions, negotiations or submissions of proposals or
offers in respect of an Acquisition Transaction, (iii) furnish or
cause to be furnished, to any Person, any information concerning the
business, operations, properties or assets of either Company in
connection with an Acquisition Transaction, or (iv) otherwise
cooperate in any way with, or assist or participate in, facilitate or
encourage, any effort or attempt by any other Person to do or seek any
of the foregoing. Any Kind and the Sellers will inform the Purchaser
in writing immediately following the receipt by any Seller, either
Company or any Representative of any proposal or inquiry in respect of
any Acquisition Transaction.
6.6 Preservation of Records. Subject to Section 6.13(b)
-----------------------
hereof (relating to the preservation of Tax records), the Sellers and
the Purchaser agree that each of them shall preserve and keep the
records held by any of them relating to the business
<PAGE>
of the Companies for a period of four years from the Closing Date and
shall make such records and personnel available to the other as may be
reasonably required by such party in connection with, among other
things, any insurance claims by, legal proceedings against or
governmental investigations of the Sellers or the Purchaser or any of
their Affiliates or in order to enable the Sellers or the Purchaser to
comply with their respective obligations under this Agreement, the
Noncompetition Agreements and each other agreement, document or
instrument contemplated hereby or thereby. In the event any of the
Sellers or the Purchaser wishes to destroy such records after that
time, such party shall first give ninety (90) days prior written
notice to the other and such other party shall have the right at its
option and expense, upon prior written notice given to such party
within that ninety (90) day period, to take possession of the records
within one hundred and eighty (180) days after the date of such
notice.
6.7 Publicity. None of Any Kind, U.S. Check, the Sellers,
---------
the Purchaser or DFG shall issue any press release or public
announcement concerning this Agreement or the transactions
contemplated hereby without obtaining the prior written approval of
the other parties hereto, which approval will not be unreasonably
withheld or delayed, unless, in the sole judgment of the Purchaser,
disclosure is otherwise required by applicable Law, provided that, to
the extent required by applicable Law, the party intending to make
such release shall use its best efforts consistent with such
applicable Law to consult with the other party with respect to the
text thereof.
6.8 Repayment of Loans; Turn Over of Funds. (a) On or
--------------------------------------
prior to the Closing Date, all loans or other advances from either
Company to the Sellers or any of their Affiliates, including any
accrued and unpaid interest thereon, shall be repaid in full and all
loans or other advances from the Sellers or any of their Affiliates to
either Company, including any accrued interest thereon, shall be paid
in full (collectively the "Affiliate Loans").
(b) On or prior to the Closing Date, the Sellers shall
cause the obligations owed to Wells Fargo Bank pursuant to loan
numbers 02-980-4850-4 and 02-9804-930-4 to be repaid and discharged in
full.
(c) All amounts which are paid in respect of the Excluded
Assets and are received by either Company following the Closing shall
be received by them as agent, in trust for and on behalf of the
Shareholders, the Limited Partners and Any Kind, in its capacity as
the general partner of U.S. Check, as applicable. All amounts which
are received by any of the Sellers following
<PAGE>
the Closing relating to the operations or business of either Company
(other than those amounts received by any of them in respect of the
Excluded Assets) shall be received by them as agent, in trust for and
on behalf of the applicable Company. The Purchaser and DFG shall
cause the Companies to, and the Sellers shall, pay promptly all such
amounts to the Person that is entitled to such amounts and shall
provide to such Person information as to the nature, source and
classification of such payments, including any invoice relating
thereto.
6.9 Use of Name. The Sellers hereby agree that upon the
-----------
consummation of the transactions contemplated hereby, the Purchaser,
Any Kind and U.S. Check shall have the sole right to the use of the
names "Any Kind", "Any Kind Check Cashing", "U.S. Check", and "U.S.
Check Exchange" and the Sellers shall not, and shall not cause or
permit any of their Affiliate to, use such names or any variation or
simulation thereof in any business or manner, either involving check
cashing or otherwise; provided, however, the Baltimore area may
-------- -------
continue to use the name "All Kinds of Checks Cashed."
6.10 Non-Competition Agreements. Each Seller hereby agrees
--------------------------
that, on or prior to the Closing Date, such Person shall execute and
deliver to Purchaser a Noncompetition Agreement, substantially in the
form of Exhibit A hereto.
6.11 Seller Releases. Each Seller hereby agrees that, on
---------------
or prior to the Closing Date, such Person shall execute and deliver to
the Purchaser and the Companies a release, substantially in the form
of Exhibit E hereto (the "Seller Release").
6.12 Employee Benefits and Employment.
--------------------------------
(a) The Sellers shall, no later than the Closing Date,
assume and maintain sponsorship and full responsibility of each of the
Employee Benefit Plans, and to the extent necessary shall cause Any
Kind and U.S. Check to terminate or otherwise cease its sponsorship of
the Employee Benefit Plans.
(b) Sellers shall deliver to Purchaser at least 5 Business
Days prior to the Closing Date a complete and correct list of all
employees of either of the Companies (the "Employees") setting forth
their names, employment position, salary or hourly wage rate, location
as of June 30, 1996 and separately identifying those Employees who
were actively employed on such date ("Active Employees") and those
Employees who were not actively employed on such date (i.e., were
absent due to disability, sickness or leave of absence) (the "Inactive
Employees").
<PAGE>
6.13 Tax Matters.
-----------
(a) Preparation of Tax Returns; Payment of Taxes
--------------------------------------------
(i)The Sellers' Representative, Any Kind and Purchaser will, to the
extent permitted by applicable law, elect with the relevant taxing
authority to close the taxable period of Any Kind on the Closing Date.
In any case where applicable law does not permit Any Kind to close its
taxable year on the Closing Date, then Taxes, if any, attributable to
the taxable period of Any Kind beginning before and ending after the
Closing Date shall be allocated (a) to the Shareholders for the period
up to and including the Closing Date, and (a) to Purchaser for the
period subsequent to the Closing Date. For purposes of this Section
6.13(a), Taxes for the period up to and including the Closing Date and
for the period subsequent to the Closing Date shall be determined on
the basis of an interim closing of the books as of the Closing Date
or, to the extent not susceptible to such allocation, by apportionment
on the basis of elapsed days.
(ii) The Sellers' Representative shall be responsible
for filing or causing to be filed all Tax Returns required to be filed
by or on behalf of Any Kind, U.S. Check and/or their operations and
assets on or before the Closing Date (taking into account applicable
extensions) and shall pay or cause to be paid any Taxes shown to be
due thereon. The Sellers' Representative shall file all such Tax
Returns in a manner consistent with past practices and, upon
Purchaser's request, shall provide copies of such Tax Returns to
Purchaser for Purchaser's review and comment at least twenty (20)
Business Days prior to filing. Purchaser shall be responsible for
filing or causing to be filed all Tax Returns required to be filed by
or on behalf of Any Kind, U.S. Check and/or their operations and
assets after the Closing Date (taking into account applicable
extensions) and shall pay or cause to be paid any Taxes shown to be
due thereon subject to the amount of any Taxes that are the
responsibility of the Shareholders pursuant to Section 6.13(a)(iii).
(iii) With respect to any Tax Return of Any Kind
required to be filed by Purchaser for a taxable period of Any Kind
beginning before and ending on or after the Closing Date, Purchaser
shall provide the Sellers' Representative with a statement setting
forth the amount of Tax shown on such Tax Return for which the
Shareholders are responsible pursuant to Section 6.13(a)(i) (the
"Statement") at least twenty (20) business days prior to the due date
for filing of such Tax Return (including extensions). Not later than
five (5) business days before the due date for payment of Taxes with
respect to such Tax Return, the Shareholders shall pay to Purchaser an
amount equal to the Taxes
<PAGE>
shown on the Statement as being the responsibility of the Shareholders
pursuant to Section 6.13(a)(i) hereof. No payment pursuant to this
Section 6.13(a)(iii) shall excuse the Shareholders from their
indemnification obligations pursuant to Section 9.5 hereof should the
amount of Taxes as ultimately determined (on audit or otherwise), for
the periods covered by such Tax Returns and which are the
responsibility of the Shareholders, exceed the amount of the
Shareholders' payment under this Section 6.13(a)(iii).
(iv) The Shareholders may not file any amended Tax
Returns or refund claims in respect of any taxable period of Any Kind
ending on or prior to the Closing Date without the prior written
consent of Purchaser.
(v) All profits and losses of U.S. Check attributable
to the limited partners' interests in U.S. Check shall be allocated
between the Limited Partners and the Purchaser, as the substitute
limited partner of U.S. Check, in accordance with Section 706 of the
Code and the Treasury Regulations promulgated thereunder on the basis
of an interim closing of the books. Distributions (not including the
Purchase Price) made by U.S. Check in respect of the limited partners'
interests after the Closing shall be made to the Purchaser, as the
substitute limited partner of U.S. Check.
(b) Cooperation with Respect to Tax Returns. Purchaser
---------------------------------------
and Sellers agree to furnish or cause to be furnished to each other,
and each at their own expense, as promptly as practicable, such
information (including access to books and records) and assistance,
including making employees available on a mutually convenient basis to
provide additional information and explanations of any material
provided, relating to each Company as is reasonably necessary for the
filing of any Tax Return, for the preparation for any audit, and for
the prosecution or defense of any claim, suit or proceeding relating
to any adjustment or proposed adjustment with respect to Taxes.
Purchaser and Sellers shall retain all information, records or
documents in their possession relating to each Company that might be
relevant to computations or payments required after the Closing Date
with respect to Tax matters relating to any taxable period ending on,
prior to or including the Closing Date until the expiration of the
relevant statute of limitations or extensions thereof or, if a
proceeding has been instituted for which the information, records or
documents is required, until there is a final determination with
respect to such proceeding.
(c) Tax Audits.
----------
<PAGE>
(i) Purchaser shall promptly notify the Sellers'
Representative upon receipt by Purchaser or Any Kind of written notice
of any Tax audits of or proposed assessments against Any Kind for
taxable periods of Any Kind ending on or prior to the Closing Date;
provided, however, that the failure of Purchaser to give the Sellers'
-------- -------
Representative prompt notice as required herein shall not relieve the
Shareholders of any of their obligations to pay such Taxes except and
to the extent that the Shareholders are actually and materially
prejudiced thereby. The Sellers' Representative shall have the right
to represent Any Kind's interests in any such Tax audit or
administrative or court proceeding and to employ counsel of its
choice; provided, that (i) the Sellers' Representative shall keep the
--------
Purchaser apprised of the status of any Tax audits or administrative
or court proceedings and the Purchaser shall have the right to consult
with the Sellers' Representative and its counsel, at the Purchaser's
cost and expense, in connection therewith and (ii) in the event that a
settlement or compromise thereof would obligate either Company or the
Purchaser to make any monetary payment or would otherwise adversely
effect either Company, the Purchaser or any of their Affiliates, the
Sellers' Representative and/or the Sellers may not agree to such a
settlement or compromise without the prior consent of the Purchaser
which consent will not be unreasonably withheld or delayed.
(ii) The Sellers' Representative shall promptly
notify Purchaser upon receipt by any of the Sellers of written notice
of any Tax audit or proposed assessment or other proposed change or
adjustment which may affect either Company or its Tax attributes. The
Sellers' Representative shall keep Purchaser duly informed of the
progress thereof and, if the results of such Tax audit or proceeding
may have an adverse effect on either Company, Purchaser or any of
their Affiliates for any taxable period including or ending after the
Closing Date, then the Sellers' Representative and/or the Sellers may
not agree to a settlement or compromise thereof without Purchaser's
consent, which consent will not be unreasonably withheld or delayed.
(d) Transfer Taxes. The Purchaser shall be liable for and
--------------
shall pay all sales, use, stamp, documentary, filing, recording,
transfer or similar fees or taxes or governmental charges (including,
without limitation, FAA, ICC, DOT, real estate and motor vehicle
registration, title recording or filing fees and other amounts payable
in respect of transfer filings) as levied by any taxing authority or
governmental agency in connection with the transactions contemplated
by this Agreement (other than taxes measured by or with respect to
income imposed on any Seller or their respective Affiliates). The
Sellers hereby agree to file all necessary documents (including, but
not limited to, all Tax Returns) with respect to all such amounts in a
timely manner.
<PAGE>
ARTICLE VII
CONDITIONS TO CLOSING
7.1 Conditions Precedent to Obligations of Purchaser. The
------------------------------------------------
obligation of the Purchaser and DFG to consummate the transactions
contemplated by this Agreement is subject to the fulfillment, on or
prior to the Closing Date, of each of the following conditions (any or
all of which may be waived by the Purchaser in whole or in part):
(a) all representations and warranties of the Sellers
contained herein shall be true and correct as of the date hereof;
(b) all representations and warranties of the Sellers
contained herein qualified as to materiality shall be true and
correct, and the representations and warranties of the Sellers
contained herein not qualified as to materiality shall be true and
correct in all material respects, at and as of the Closing Date with
the same effect as though those representations and warranties had
been made again at and as of that time;
(c) The Sellers and the Companies shall have performed and
complied in all material respects with all obligations and covenants
required by this Agreement to be performed or complied with by them on
or prior to the Closing Date;
(d) the Purchaser shall have been furnished with a
certificate (dated the Closing Date and in form and substance
reasonably satisfactory to the Purchaser) executed by the Sellers'
Representative certifying as to the fulfillment of the conditions
specified in Sections 7.1(a), 7.1(b) and 7.1(c) hereof;
(e) certificates representing 100% of the DFG stock to be
acquired by the DFG Stock Purchaser pursuant to the DFG Purchase
Agreement shall have been, or shall at the Closing be, delivered
pursuant to the terms of the DFG Purchase Agreement;
(f) the Purchaser shall have obtained all consents and
waivers referred to in Section 5.3 hereof with respect to the
transactions contemplated by this Agreement and the Purchaser
Documents;
(g) the Purchaser shall have received from each of Any
Kind and U.S. Check audited financial statements as of, and for the
years ending, December 31, 1994 and 1995;
(h) there shall not have been or occurred any Material
Adverse Change since December 31, 1995 nor shall the audited financial
statements as of, and for the year ending, December 31,
<PAGE>
1995 reflect any significant adjustments from the unaudited financial
statements previously provided to the Purchaser;
(i) the Sellers shall have obtained all consents and
waivers referred to in Section 4.6 hereof, in a form reasonably
satisfactory to the Purchaser, with respect to the transactions
contemplated by this Agreement and the Seller Documents;
(j) no Legal Proceedings shall have been instituted or
threatened or claim or demand made against any of the Sellers, the
Companies, or the Purchaser seeking to restrain or prohibit or to
obtain substantial damages with respect to the consummation of the
transactions contemplated hereby, and there shall not be in effect any
Order by a Governmental Body of competent jurisdiction restraining,
enjoining or otherwise prohibiting the consummation of the
transactions contemplated hereby;
(k) all Affiliate Loans shall have been repaid to or by
Any Kind and U.S. Check on or prior to the Closing Date;
(l) the Sellers shall have furnished, or caused to be
furnished, to Purchaser, in form and substance satisfactory to
Purchaser, such certificates and other evidence as Purchaser may have
reasonably requested as to the satisfaction of the conditions
contained in this Section and as to such other matters relating to the
representations, warranties, covenants and undertakings in this
Agreement as Purchaser may reasonably request;
(m) estoppels and any necessary consents from the
landlords and lessors under each Real Property Lease shall have been
obtained in form and substance satisfactory to Purchaser;
(n) in accordance with Section 1.5, the Sellers shall have
furnished, or caused to be furnished, to Purchaser in form and
substance satisfactory to Purchaser, such evidence as Purchaser may
have reasonably requested as to the making of the Incurred Capital
Expenditures;
(o) Any Kind and the Limited Partners shall have taken all
steps necessary to enable Purchaser to become a substitute limited
partner in U.S. Check as of the Closing;
(p) the DFG Stock Purchaser shall have executed the DFG
Purchase Agreement and the Shareholders Agreement; and
(q) the Purchaser shall have received duly executed copies
of each of the documents enumerated in Section 8.1.
7.2 Conditions Precedent to Obligations of the Sellers.
--------------------------------------------------
The obligations of the Sellers to consummate the
<PAGE>
transactions contemplated by this Agreement are subject to the
fulfillment, prior to or on the Closing Date, of each of the following
conditions (any or all of which may be waived by the Sellers'
Representative in whole or in part to the extent permitted by
applicable law):
(a) all representations and warranties of the Purchaser
contained herein shall be true and correct as of the date hereof;
(b) all representations and warranties of the Purchaser
contained herein qualified as to materiality shall be true and
correct, and all representations and warranties of the Purchaser
contained herein not qualified as to materiality shall be true and
correct in all material respects, at and as of the Closing Date with
the same effect as though those representations and warranties had
been made again at and as of that date;
(c) the Purchaser and DFG shall have performed and
complied in all material respects with all obligations and covenants
required by this Agreement to be performed or complied with by
Purchaser or DFG on or prior to the Closing Date;
(d) payment of the amounts specified in Section 2.2;
(e) the Sellers shall have been furnished with a
certificate (dated the Closing Date and in form and substance
reasonably satisfactory to the Sellers) executed by the Chief
Executive Officer of each of the Purchaser and DFG certifying as to
the fulfillment of the conditions specified in Sections 7.2(a), 7.2(b)
and 7.2(c);
(f) certificates representing 100% of the DFG stock to be
acquired by the DFG Stock Purchaser pursuant to the DFG Purchase
Agreement shall have been, or shall at the Closing be, delivered
pursuant to the terms of the DFG Purchase Agreement;
(g) there shall not have been or occurred any material
adverse change in the business, properties, results of operations, or
financial condition of DFG and its Subsidiaries, taken as a whole,
since December 31, 1995;
(h) no Legal Proceedings shall have been instituted or
threatened or claim or demand made against the Sellers seeking to
restrain or prohibit or to obtain substantial damages with respect to
the consummation of the transactions contemplated hereby, and there
shall not be in effect any Order by a Governmental Body of competent
jurisdiction restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated hereby;
<PAGE>
(i) DFG shall have executed the DFG Purchase Agreement;
(j) DFG and the Purchaser shall have furnished, or caused
to be furnished, to Sellers, in form and substance satisfactory to
Sellers, such certificates and other evidence as Sellers may have
reasonably requested as to the satisfaction of the conditions
contained in this Section and as to such other matters relating to the
representations, warranties, covenants and undertakings in this
Agreement as Sellers may reasonably request; and
(k) the Sellers shall have received duly executed copies
of each of the documents enumerated in Section 8.2.
ARTICLE VIII
DOCUMENTS TO BE DELIVERED
8.1 Documents to be Delivered by the Sellers. At the
----------------------------------------
Closing, the Sellers shall deliver, or cause to be delivered, to the
Purchaser the following:
(a) stock certificates representing the Shares, duly
endorsed in blank or accompanied by stock transfer powers and with all
requisite stock transfer tax stamps attached;
(b) the certificate referred to in Section 7.1(d) hereof;
(c) the opinion of Prindle, Decker & Amaro, special
counsel to the Sellers, in substantially the form of Exhibit C hereto;
(d) copies of all consents and waivers referred to in
Section 7.1(i) hereof;
(e) written evidence of (i) the repayment to Any Kind and
U.S. Check of all Affiliate Loans, and (ii) the repayment by each of
Any Kind and U.S. Check of all Affiliate Loans;
(f) Noncompetition Agreements, substantially in the form
of Exhibit A hereto, duly executed by each Seller;
(g) written resignations of each of the directors of Any
Kind;
(h) duly executed FIRPTA Affidavits for each Seller;
<PAGE>
(i) certificates of good standing with respect to each
Company issued by the Secretary of State of the state of their
organization and for each state in which such Person is qualified to
do business as a foreign corporation or limited partnership;
(j) a duly executed copy of the Shareholders Agreement,
executed by each DFG Stock Purchaser;
(k) the Limited Partners shall have delivered to Purchaser
such bills of sale, assignments, special warranty deeds and other good
and sufficient instruments of transfer and conveyance, in form and
substance satisfactory to Purchaser and its counsel, as shall be
effective to vest in Purchaser, and to evidence the vesting in
Purchaser of, good and marketable title to the LP Interests;
(l) full releases and discharges of any claims by any
Affiliates of the Companies (other than the Sellers) in respect of any
obligations owed by either Company to such Affiliate (other than in
respect of the leases relating to 2131 Canal Street, New Orleans La.
and 5612 N. Broad Street, Philadelphia, Pa.)
(m) Seller Releases, substantially in the form of Exhibit
E hereto, duly executed by each Seller;
(n) duly executed copies of the DFG Purchase Agreement,
executed by each DFG Stock Purchaser; and
(o) such other documents as the Purchaser shall reasonably
request.
8.2 Documents to be Delivered by the Purchaser and DFG.
--------------------------------------------------
At the Closing, the Purchaser and DFG shall deliver to the Sellers the
following:
(a) evidence of the payments required to be made pursuant
to Section 2.2 hereof;
(b) the certificate referred to in Section 7.2(d) hereof;
(c) two original counterparts of the opinion of Weil,
Gotshal & Manges LLP, counsel to the Purchaser, in the form of
Exhibit D hereto;
(d) certificates representing the DFG Common Stock
referred to in Section 2.3;
<PAGE>
(e) a letter from Purchaser, dated the Closing Date,
regarding Purchaser's lack of actual knowledge as to the material
breach of any representation or warranty as of such date;
(f) a duly executed copy of the DFG Purchase Agreement,
executed by DFG; and
(g) such other documents as the Sellers shall reasonably
request.
ARTICLE IX
INDEMNIFICATION
9.1 Survival. The representations and warranties of the
--------
Sellers and Purchaser shall remain operative and in full force and
effect for a period of twenty-four (24) months after the Closing Date,
regardless of any investigation or statement as to the results thereof
made by or on behalf of any party hereto; provided that (i) the
representations and warranties contained in Section 4.20 as well as
the indemnities contained in any of Sections 9.2(a)(iii), 9.2(b)(iii)
and 9.2(c)(iii) shall remain operative and in full force and effect
until June 30, 2001, (ii) the representations and warranties contained
in Section 4.11 shall remain operative and in full force and effect
until sixty days following the expiration of the applicable Tax
statute of limitations with respect to the relevant taxable period
(including extensions), and (iii) the representations and warranties
contained in Sections 4.3, 4.4, 4.7 and 4.16 shall survive
indefinitely. Notwithstanding anything to the contrary herein, any
representation or warranty which is the subject of a claim or dispute
which is asserted in writing prior to the expiration of the applicable
period set forth above shall survive with respect to such claim or
dispute until the final resolution and satisfaction thereof.
9.2 General Indemnification.
-----------------------
(a) Brimhall hereby agrees to indemnify and hold harmless
the Purchaser and its Affiliates (including, after the Closing, the
Companies) and their respective directors, officers, employees,
agents, successors and assigns (collectively, the "Purchaser
Indemnified Parties") from and against and in respect of any and all
Losses resulting from, arising out of, based on or relating to:
(i) the failure of any representation or warranty of any
Seller or any of the Companies set forth in this Agreement, any
Seller Document or any certificate or
<PAGE>
instrument delivered by or on behalf of any Seller pursuant to
this Agreement, to be true and correct in all respects both as of
the date of this Agreement and on the Closing Date at signing and
at Closing at signing and at Closing;
(ii) the breach, on or prior to Closing Date, of any
covenant or other agreement on the part of any Seller or any of
the Companies under this Agreement or any Seller Document and the
breach, after the Closing, of any covenant or other agreement on
the part of Brimhall under this Agreement or any Seller Document;
(iii) (A) any Release of Hazardous Materials in, on, at, or
from the Company Properties which occurred, or resulted from
operations occurring, as of or prior to the Closing; (B) any tort
liability to third parties as a result of any Releases or from
exposure to Hazardous Materials arising from any Releases as of
or prior to the Closing; (C) notification or designation under
any Environmental Law as a potentially responsible party for
onsite or offsite disposal of Hazardous Materials, which disposal
occurred as of or prior to the Closing, or the listing of any
asset of Any Kind or U.S. Check on the CERCLA National Priorities
List or any similar list under any Environmental Law as a result
of disposal of Hazardous Materials as of or prior to the Closing;
or (D) any other Environmental Costs and Liabilities and any
other Environmental Claim or Remedial Action resulting from or
based upon anything related to the property currently or
previously owned, leased or operated by Any Kind or U.S. Check or
any predecessors thereof conducted prior to Closing;
(iv) the Excluded Assets or the ownership, operation, lease
or use thereof, or any action taken with respect thereto, by Any
Kind, U.S. Check, or by any other Person; or
(v) the contract identified on Schedule 4.15 relating to
the obligations owned to National Financial Exchange, Inc.
relating to the store at 15381 Seventh Street, Victorville,
California or any of the liens disclosed on Schedule 4.11.
(b) The Shareholders (other than Brimhall) hereby agree to
indemnify and hold harmless the Purchaser Indemnified Parties from and
against and in respect of any and all Losses resulting from, arising
out of, based on or relating to:
(i) the failure of any representation or warranty of any
Shareholder or Any Kind set forth in this Agreement, any Seller
Document or any certificate or instrument delivered by or on
behalf of any of the Shareholders or Any Kind pursuant
<PAGE>
to this Agreement, to be true and correct in all respects both as
of the date of this Agreement and on the Closing Date at signing
and at Closing;
(ii) the breach of any covenant or other agreement on the
part of any Shareholder under this Agreement or any Seller
Document;
(iii) (A) any Release of Hazardous Materials in, on, at, or
from the Company Properties of Any Kind which occurred, or
resulted from operations occurring, as of or prior to the
Closing; (B) any tort liability of Any Kind to third parties as a
result of any Releases or from exposure to Hazardous Materials
arising from any Releases as of or prior to the Closing;
(C) notification or designation under any Environmental Law as a
potentially responsible party for onsite or offsite disposal of
Hazardous Materials, which disposal occurred as of or prior to
the Closing, or the listing of any asset of Any Kind on the
CERCLA National Priorities List or any similar list under any
Environmental Law as a result of disposal of Hazardous Materials
as of or prior to the Closing in all cases related to Any Kind;
or (D) any other Environmental Costs and Liabilities and any
other Environmental Claim or Remedial Action resulting from or
based upon anything related to the property currently or
previously owned, leased or operated by Any Kind or any
predecessors thereof conducted prior to Closing;
(iv) the Excluded Assets owned by Any Kind or the
ownership, operation, lease or use thereof, or any action taken
with respect thereto, by Any Kind or any other Person; or
(v) any of the liens disclosed on Schedule 4.11.
The liability of each Shareholder (other than Brimhall) under
this Section 9.2(b) shall be proportionate and equal to the product of
(x) the amount of Losses subject to indemnification under this Section
9.2(b) and (y) the percentage set forth opposite such Shareholder's
name on Schedule 9.2(b); provided, however, each Shareholder (A) shall
-------- -------
be liable for all Losses resulting from, arising out of, based on or
relating to any breach, after the Closing, by such Shareholder, of any
covenant or other agreement on the part of such Shareholder under this
Agreement or any Seller Document and (B) shall not be liable for any
Losses resulting from, arising out of, based on or relating to any
breach, after the Closing, by another Shareholder, of any covenant or
other agreement on the part of such other Shareholder under this
Agreement or any Seller Document.
<PAGE>
(c) The Limited Partners hereby agree to indemnify and
hold harmless the Purchaser Indemnified Parties from and against and
in respect of any and all Losses resulting from, arising out of, based
on or relating to:
(i) the failure of any representation or warranty of any
Limited Partner or U.S. Check set forth in this Agreement, any
Seller Document or any certificate or instrument delivered by or
on behalf of any of the Limited Partners or U.S. Check pursuant
to this Agreement, to be true and correct in all respects both as
of the date of this Agreement and on the Closing Date at signing
and at Closing;
(ii) the breach of any covenant or other agreement on the
part of any Limited Partner or U.S. Check under this Agreement or
any Seller Document;
(iii) (A) any Release of Hazardous Materials in, on, at, or
from the Company Properties of U.S. Check which occurred, or
resulted from operations occurring, as of or prior to the
Closing; (B) any tort liability of U.S. Check to third parties as
a result of any Releases or from exposure to Hazardous Materials
arising from any Releases as of or prior to the Closing;
(C) notification or designation under any Environmental Law as a
potentially responsible party for onsite or offsite disposal of
Hazardous Materials, which disposal occurred as of or prior to
the Closing, or the listing of any asset of U.S. Check on the
CERCLA National Priorities List or any similar list under any
Environmental Law as a result of disposal of Hazardous Materials
as of or prior to the Closing in all cases related to U.S. Check;
or (D) any other Environmental Costs and Liabilities and any
other Environmental Claim or Remedial Action resulting from or
based upon anything related to the property currently or
previously owned, leased or operated by U.S. Check or any
predecessors thereof conducted prior to Closing;
(iv) the Excluded Assets owned by U.S. Check or the
ownership, operation, lease or use thereof, or any action taken
with respect thereto, by U.S. Check or any other Person; or
(v) the contract identified on Schedule 4.15 relating to
the obligations owned to National Financial Exchange, Inc.
relating to the store at 15381 Seventh Street, Victorville,
California or any of the liens disclosed on Schedule 4.11.
The liability of each Limited Partner under this Section
9.2(c) shall be equal to the product of (x) the amount of Losses
subject to indemnification under this Section 9.2(c) and (y) the
<PAGE>
percentage set forth opposite such Limited Partner's name on Schedule
9.2(c); provided, however, each Limited Partner (A) shall be liable
-------- -------
for all Losses resulting from, arising out of, based on or relating to
any breach, after the Closing, by such Limited Partner, of any
covenant or other agreement on the part of such Limited Partner under
this Agreement or any Seller Document and (B) shall not be liable for
any Losses resulting from, arising out of, based on or relating to any
breach, after the Closing, by another Limited Partner, of any covenant
or other agreement on the part of such other Limited Partner under
this Agreement or any Seller Document.
(d) Purchaser and DFG hereby agree to indemnify and hold
harmless the Sellers and their respective Affiliates, and their
respective directors, officers, employees, agents, successors and
assigns (collectively, the "Seller Indemnified Parties") from and
against and in respect of any and all Losses resulting from, arising
out of, based on or relating to:
(i) the failure of any representation or warranty of the
Purchaser or DFG set forth in this Agreement or any Purchaser
Document or any certificate and instrument delivered by or on
behalf of the Purchaser or DFG pursuant to this Agreement, to be
true and correct in all respects both as of the date of this
Agreement and on the Closing Date;
(ii) the breach of any covenant or other agreement on the
part of the Purchaser or DFG under this Agreement or any
Purchaser Document;
(iii) any misrepresentation of fact made by Purchaser or
DFG to a lessor of real property to any of the Companies in any
document submitted by Purchaser or DFG to such lessor in
connection with seeking such lessor's consent to the transfer of
the Shares or the LP Interests, as the case may be;
(iv) the guarantees listed on Schedule 6.4; or
(v) any acts, omissions, occurrences, events or obligations
of Any Kind or U.S. Check, arising after the Closing Date,
whether in contract or tort (including obligations accruing after
the Closing Date based upon agreements entered into prior to the
Closing Date), unless (i) any Losses resulting from, arising out
of, based on or relating to any of the foregoing result, arise,
are based on or relate to a breach (or any circumstance or event
constituting a breach) of any representation, warranty or
covenant of any of the Sellers under this Agreement or any
Purchaser Document or (ii) such act, omission, occurrence,
<PAGE>
event or obligation (or any Losses relating thereto) is of the
type or kind described in Sections 9.2(a), 9.2(b) or 9.2(c)
hereof.
9.3 Limitations on Indemnification for Breaches of
----------------------------------------------
Representations and Warranties.
------------------------------
(a) An indemnifying party shall not have any liability
under Section 9.2(a)(i), 9.2(b)(i), 9.2(c)(i) or 9.2(d)(i) hereof
unless and until the aggregate amount of Losses subject to
indemnification thereunder exceeds $50,000 and, in such event, the
indemnifying party shall be required to pay the entire amount of such
Losses in excess of $50,000.
(b) The liability of the Sellers, in the aggregate,
pursuant to (i) Sections 9.2(a)(i), 9.2(b)(i) or 9.2(c)(i) hereof
(solely to the extent that such indemnities in Sections 9.2(a)(i),
9.2(b)(i) or 9.2(c)(i) relate to a breach of the representations and
warranties contained in Section 4.20), and (ii) Sections 9.2(a)(iii),
9.2(b)(iii) or 9.2(c)(iii) hereof shall not exceed $75,000 (including
Losses arising from defense costs).
9.4 Indemnification Procedures. Except as provided in
--------------------------
Section 6.13 with respect to Taxes, for the purposes of administering
the indemnification provisions of Section 9.2, the following
procedures shall apply:
(a) If an indemnified party shall receive notice of any
action or proceeding by a third party with respect to which the
indemnified party asserts is indemnifiable under Section 9.2 (a
"Claim"), the indemnified party shall notify the indemnifying party
(the "Indemnitor") of such Claim in writing promptly following the
receipt of notice of the commencement of such Claim. The failure to
give notice as required by this Section 9.4 in a timely fashion shall
not result in a waiver of any right to indemnification hereunder
except to the extent that the Indemnitor is actually prejudiced
thereby.
(b) Except as provided below, the Indemnitor shall be
entitled to assume the defense or settlement of any Claim of the type
referred to in clause (a) hereof (with counsel reasonably satisfactory
to the indemnified parties) if the Indemnitor shall provide the
indemnified parties a written acknowledgement of its liability to
indemnify such indemnified parties against all Losses resulting from,
relating to or arising out of such Claim. If the Indemnitor assumes
any such defense or settlement, it shall pursue such defense or
settlement in good faith. If the Indemnitor fails to elect in
writing, within 10 days after the notification referred to above, to
assume the defense of any Claim as provided above, the indemnified
party may engage counsel to defend, settle
<PAGE>
or otherwise dispose of such Claim, which counsel shall be reasonably
satisfactory to the Indemnitor; provided, however, that the
-------- -------
indemnified party shall not settle or compromise any such Claim
without the consent of the Indemnitor (which consent will not be
unreasonably withheld or delayed).
(c) Notwithstanding anything to the contrary contained
herein, the Purchaser shall have the sole right, with counsel
reasonably satisfactory to the Indemnitor, to defend and settle in its
sole discretion any Claim which constitutes a Non-Assumable Claim and
no other party hereto shall be entitled to assume the defense thereof
or settle such claim; provided, however, that the Purchaser shall seek
-------- -------
the written consent (which consent shall not be unreasonably withheld
or delayed) of the Indemnitor before agreeing to any monetary
settlement of any Non-Assumable Claim for which Purchaser seeks
indemnification pursuant to this Article 9. A "Non-Assumable Claim"
means any claim, action or proceeding (i) arising out of or in
connection with, or relating to, any violation or asserted violation
of any Law, Order, judgment or decree, (ii) involving any Governmental
Body, or (iii) seeking injunctive relief.
(d) In cases where the Indemnitor has elected to assume
the defense or settlement with respect to a Claim as provided above,
the Indemnitor shall be entitled to assume such defense or settlement
provided that: (i) the indemnified party (and its counsel) shall be
--------
entitled to continue to participate at its own cost in any such action
or proceeding or in any negotiations or proceedings to settle or
otherwise eliminate any claim for which indemnification is being
sought; (ii) the Indemnitor shall not be entitled to settle or
compromise any such claim without the consent or agreement of the
indemnified party (such consent not to be unreasonably withheld or
delayed); and (iii) after written notice by the Indemnitor to the
indemnified party of its election to assume control of the defense of
any Claim, the Indemnitor shall not be liable to such indemnified
party hereunder for any attorneys' fees and disbursements subsequently
incurred by such indemnified party in connection therewith.
(e) In the event that a claim or demand for
indemnification may be made by the Purchaser under more than one
provision of this Section 9, the Purchaser shall have the option to
elect the provision of this Section 9 under which it chooses to make
such claim or demand for indemnification by the Purchaser.
9.5 Tax Matters.
-----------
(a) Subject to the terms of subsection (b) hereof, the
Shareholders (other than Brimhall) (with respect to themselves and
<PAGE>
Any Kind), the Limited Partners (with respect to themselves and U.S.
Check) and Brimhall (with respect to himself and each Company) agree
to indemnify and hold harmless the Purchaser and its Affiliates
(including, after the Closing, Any Kind and U.S. Check), and in each
case their respective directors, officers, employees and agents, from
and against any and all Losses resulting from, arising out of, based
on or relating to:
(i) any and all Taxes with respect to all taxable
periods (or portions thereof) of Any Kind or U.S. Check, as the case
may be, ending on or prior to the Closing and, to the extent provided
in Section 6.13(a) hereof, all taxable periods that include, and end
after, the Closing Date; and
(ii) any breach of any representation, warranty or
covenant contained in Sections 4.11 or 6.13 hereof; and
(iii) any Taxes for which the Shareholders are
liable pursuant to subsection 6.13(a) hereof.
(b) The liability of each Shareholder (other than
Brimhall) or Limited Partner, as the case may be, under Section 9.5(a)
shall be proportionate and equal to the product of (x) the amount of
Losses subject to indemnification under Section 9.5(a) and (y) the
percentage interest set forth opposite such Shareholder's or Limited
Partner's name on Schedule 9.2(b) or 9.2(c), as applicable.
(c) Any claim for indemnity made under this Section 9.5
may be made at any time prior to sixty days following the expiration
of the applicable Tax statute of limitations with respect to the
relevant taxable period (including extensions; provided that Purchaser
--------
shall not agree to any extensions without obtaining the prior Consent
of the Sellers' Representative).
9.6 Employee Benefits and Labor Indemnity. (a) The
-------------------------------------
Shareholders (other than Brimhall) (with respect to themselves and Any
Kind), the Limited Partners (with respect to themselves and U.S.
Check) and Brimhall (with respect to himself and each Company) hereby
agree to indemnify and hold the Purchaser Indemnified Parties harmless
from and against any and all Losses arising out of or based upon or
with respect to (i) any Employee Benefit Plan, including, but not
limited to, any obligations arising under Part 6 of Title I of ERISA
or Section 4980B of the Code or (ii) the employment or termination of
employment of any Person prior to the Closing with either of the
Companies including, without limitation, any claim with respect to,
relating to arising out of or in connection with discrimination by
either of the Companies or wrongful discharge, whether a claim is made
<PAGE>
before or after Closing or (iii) the severance benefits granted to
Steve Burningham and John Sahlin.
(b) The liability of each Shareholder (other than Brimhall)
or Limited Partner, as the case may be, under Section 9.6(a) shall be
proportionate and equal to the product of (x) the amount of Losses
subject to indemnification under Section 9.6(a) and (y) the percentage
interest set forth opposite such Shareholder's or Limited Partner's
name on Schedule 9.2(b) or 9.2(c), as applicable.
9.7 Waiver of Subrogation and Other Rights. Each Seller
--------------------------------------
hereby agrees that if, following the Closing, any payment is made or
required to be made by it pursuant to the terms of this Agreement or
the Seller Documents (including without limitation this Article IX),
none of the Sellers shall have any rights against either Company,
whether by reason of subrogation or otherwise, in respect of any such
payments, and none of the Sellers shall take any action against either
Company with respect thereto. Any such rights which any Seller may,
by operation of law or otherwise, have against either Company shall,
effective at the time of the Closing, be deemed to be hereby expressly
and knowingly waived.
9.8 Right of Offset. Without in any way limiting any
---------------
other rights or remedies Purchaser may have at law or in equity, the
Purchaser and DFG shall have the right to set off against any
dividends, distributions or other payments that DFG would otherwise be
obligated to make in respect of any DFG Common Stock held by a DFG
Stock Purchaser, the amount of any claim that Purchaser may have for
indemnification pursuant to this Agreement which has been adjudicated
by a court of competent jurisdiction in a final non-appealable
judgment or order.
9.9 Treatment of Payment. The Sellers and Purchaser agree
--------------------
to treat any indemnity payment made pursuant to Sections 9.2, 9.5 or
9.6 of this Agreement as an adjustment to the Purchase Price for
federal, state, local and foreign income tax purposes.
ARTICLE X
MISCELLANEOUS
10.1 Certain Definitions. For purposes of this Agreement,
-------------------
the following terms shall have the meanings specified in this Section
10.1:
"Acquisition Transaction" shall have the meaning set forth
-----------------------
in Section 6.5 hereof.
<PAGE>
"Active Employees" shall have the meaning ascribed to such
----------------
term in Section 6.12(b) hereof.
"Adjustment Amount" shall have the meaning ascribed to such
-----------------
term in Section 2.6 hereof.
"ADA" shall have the meaning ascribed to such term in
---
Section 4.24 hereof.
"Affiliate" means, with respect to any Person, any other
---------
Person controlling, controlled by or under common control with such
Person.
"Affiliate Loans" shall have the meaning ascribed to such
---------------
term in Section 6.8 hereof.
"Agreement" shall have the meaning ascribed to such term in
---------
the introductory paragraph hereto.
"Any Kind" shall have the meaning ascribed to such term in
--------
the introductory paragraph hereto.
"Any Kind Assets" shall have the meaning ascribed to such
---------------
term in Section 1.1 hereof.
"Assets" shall have the meaning ascribed to such term in
------
Section 1.1 hereof.
"Balance Sheet" shall have the meaning ascribed to such term
-------------
in Section 4.8 hereof.
"Balance Sheet Date" shall have the meaning ascribed to such
------------------
term in Section 4.8 hereof.
"Baltimore Store" means that certain store located in
---------------
Baltimore, Maryland and owned by Any Kind of Checks Cashed, L.P., an
Arizona limited partnership of which Any Kind is the limited partner
and Liberty, Inc. is the general partner.
"Brimhall" shall have the meaning ascribed to such term in
--------
Section 10.13 hereof.
"Business Day" means any day of the year on which national
------------
banking institutions in New York are open to the public for conducting
business and are not required or authorized to close.
"Capital Expenditures" means, for any Person for any period,
--------------------
the aggregate of all expenditures by such Person, except interest
capitalized during construction, during such period for
<PAGE>
property, plant or equipment, including, without limitation, renewals,
improvements, replacements and capitalized repairs, that would be
reflected as additions to property, plant or equipment on a
consolidated balance sheet of such Person prepared in conformity with
GAAP. For the purpose of this definition, the purchase price of
equipment which is acquired simultaneously with the trade-in of
existing equipment owned by such Person or with insurance proceeds
shall be included in Capital Expenditures only to the extent of the
gross amount of such purchase price less the credit granted by the
seller of such equipment being traded in at such time or the amount of
such proceeds, as the case may be.
"Cash on Hand" means the sum of the U.S. Cash on Hand and
------------
the U.S. Currency Equivalent.
"Claim" shall have the meaning ascribed to such term in
-----
Section 9.4(a) hereof.
"Closing" shall have the meaning ascribed to such term in
-------
Section 3.1 hereof.
"Closing Date" shall have the meaning ascribed to such term
------------
in Section 3.1 hereof.
"Closing Statement" means a statement to be delivered by the
-----------------
Purchaser to the Sellers' Representative reflecting any adjustments
required to be made to the Purchase Price pursuant to Section 2.6.
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Collectible Amounts" shall have the meaning ascribed to
-------------------
such term in Section 1.3 hereof.
"Common Stock" shall have the meaning ascribed to such term
------------
in Section 4.3 hereof.
"Companies" and "Company" shall have the meaning ascribed to
--------- -------
such terms in the recitals hereto.
"Company Property" shall have the meaning ascribed to such
----------------
term in Section 4.12(a) hereof.
"Consumer Loan" means (i) any Contract (including any
-------------
schedule or amendment thereto or assignment, assumption, renewal or
novation thereof) in existence at the time of the Closing and any
ancillary agreements relating thereto, which is in the form of any
secured or unsecured loan, with respect to which either Company is the
lender, secured party or obligee (whether initially
<PAGE>
or as an assignee) and (ii) any restructuring, modification or
extension of any Consumer Loan of the type described in clause (i)
hereof but "Consumer Loans" shall not include any Pay Day Loans.
"Consumer Loan Amount" means for a Consumer Loan, an amount
--------------------
equal to (i) the principal amount of such Consumer Loan outstanding on
the Closing Date, multiplied by (ii) 75%.
----------
"Contract" means any contract, agreement, indenture, note,
--------
bond, loan, instrument, lease, commitment or other arrangement or
agreement.
"DFG" shall have the meaning ascribed to such term in the
---
introductory paragraph hereto.
"DFG Common Stock" means the common stock of DFG Holdings,
----------------
Inc., par value $0.001 per share.
"DFG Purchase Agreement" means that certain Stock Purchase
----------------------
Agreement, substantially in the form of Exhibit F attached hereto.
"DFG Stock Purchaser" means GHB Charitable Trust #1, Lynn
-------------------
Stratford, Trustee.
"Employees" shall have the meaning ascribed to such term in
---------
Section 6.12(b) hereof.
"Employee Benefit Plans" shall have the meaning ascribed to
----------------------
such term in Section 4.16(a) hereof.
"Environmental Claim" means any accusation, allegation,
-------------------
notice of violation, action, claim, lien, demand, abatement or other
order or directive (conditional or otherwise) by any Governmental Body
or any other Person for personal injury (including sickness, disease
or death), tangible or intangible property damage, damage to the
environment, nuisance, pollution, contamination or other adverse
effects on the environment, or for fines, penalties or restrictions
resulting from or based upon (i) the existence, or the continuation of
the existence, of a Release (including, without limitation, sudden or
non-sudden accidental or non-accidental Releases) of, or exposure to,
any Hazardous Material, odor or audible noise in, into or onto the
environment (including, without limitation, the air, soil, surface
water or groundwater) at, in, by, from or related to any property
owned, operated or leased by either of the Companies or any activities
or operations thereof; (ii) the transportation, storage, treatment or
disposal of Hazardous Materials in connection with any property owned,
operated or leased by either of the Companies or any operations or
facilities thereof; or (iii) the violation, or
<PAGE>
alleged violation, of any Environmental Law of or from any
Governmental Body relating to environmental matters connected with any
property owned, operated or leased by either of the Companies.
"Environmental Costs and Liabilities" means any and all
-----------------------------------
losses, liabilities, obligations, damages, fines, penalties,
judgments, actions, claims, costs and expenses (including, without
limitation, fees, disbursements and expenses of legal counsel,
experts, engineers and consultants and the costs of investigation and
feasibility studies and Remedial Action) arising from or under any
Environmental Law or order or contract with any Governmental Body or
any other Person.
"Environmental Law" means any foreign, federal, state or
-----------------
local law, statute, regulation, code, ordinance, rule of common law or
other requirement in any way relating to the protection of human
health and safety or the environment as now or hereafter in effect
including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. Section 9601 et seq.),
-- ----
the Hazardous Materials Transportation Act (49 U.S.C. App. Section 1801 et
--
seq.), the Resource Conservation and Recovery Act (42 U.S.C. Section 6901
----
et seq.), the Clean Water Act (33 U.S.C. Section 1251 et seq.), the Clean
-- ---- -- ----
Air Act (42 U.S.C. Section 7401 et seq.) the Toxic Substances Control Act
-- ----
(15 U.S.C. Section 2601 et seq.), the Federal Insecticide, Fungicide, and
-- ----
Rodenticide Act (7 U.S.C. Section 136 et seq.), and the Occupational Safety
-- ----
and Health Act (29 U.S.C. Section 651 et seq.), as such laws have been
-- ----
amended or supplemented, and the regulations promulgated pursuant
thereto, and all analogous foreign, state or local laws.
"Environmental Permits" shall have the meaning ascribed to
---------------------
such term in Section 4.20(a).
"ERISA" shall have the meaning ascribed to such term in
-----
Section 4.16(a) hereof.
"Excluded Assets" shall have the meaning ascribed to such
---------------
term in Section 1.3 hereof.
"Excluded Pay Day Loans" means all Pay Day Loans other than
----------------------
any Louisiana Pay Day Loans.
"Expenses" shall have the meaning ascribed to such term in
--------
Section 1.4(a) hereof.
"Financial Statements" shall have the meaning ascribed to
--------------------
such term in Section 4.8 hereof.
"FIRPTA Affidavit" shall mean an affidavit of non-foreign
----------------
status that complies with Section 1445 of the Code.
<PAGE>
"Foreign Cash on Hand" means all cash in a currency other
--------------------
than U.S. Currency that is physically located in any of the Stores (as
verified in accordance with Section 2.4) on the Closing Date.
"GAAP" means United States generally accepted accounting
----
principles as of the date hereof.
"Governmental Body" means any government or governmental or
-----------------
regulatory body thereof, or political subdivision thereof, whether
federal, state, local or foreign, or any agency, instrumentality or
authority thereof, or any court or arbitrator (public or private).
"Hazardous Material" means any substance, material or waste
------------------
which is regulated by the United States, or any state or local
governmental authority including, without limitation, petroleum and
its by-products, asbestos, and any material or substance which is
defined as a "hazardous waste," "hazardous substance," "hazardous
material," "restricted hazardous waste," "industrial waste," "solid
waste," "contaminant," "pollutant," "toxic waste" or "toxic substance"
under any provision of Environmental Law.
"Inactive Employees" shall have the meaning ascribed to such
------------------
term in Section 6.12(b) hereof.
"Incurred Capital Expenditures" shall have the meaning
-----------------------------
ascribed to such term in Section 1.5 hereof.
"Indemnitor" shall have the meaning ascribed to such term in
----------
Section 9.4(a) hereof.
"Law" means any federal, state, local or foreign law
---
(including common law), statute, code, ordinance, rule, regulation or
other requirement.
"Legal Proceeding" means any judicial, administrative or
----------------
arbitral actions, suits, proceedings (public or private), claims or
governmental proceedings.
"Licenses" shall have the meaning ascribed to such term in
--------
Section 1.2(a) hereof.
"Lien" means any lien, pledge, mortgage, deed of trust,
----
security interest, claim, lease, charge, option, right of first
refusal, easement, servitude, transfer restriction under any
shareholder or similar agreement, encumbrance or any other restriction
or limitation whatsoever.
<PAGE>
"Lightning Tax" means a dissolved general partnership
-------------
formerly between Any Kind and Lightning Tax, Inc.
"Limited Partner" shall have the meaning ascribed to such
---------------
term in the introductory paragraph hereto.
"Losses" means any and all losses, liabilities (accrued,
------
absolute, contingent or otherwise), suits, proceedings, judgments,
awards, demands, settlements, fines, assessments, damages, interest
and penalties, and costs and expenses (including without limitation
reasonable attorneys' fees and litigation expenses).
"Louisiana Pay Day Loans" means those Pay Day Loans
-----------------------
originated from the operations of Stores that are located in the State
of Louisiana.
"Louisiana Pay Day Loan Amount" means, for a Louisiana Pay
-----------------------------
Day Loan, an amount equal to (i) the principal amount of such
Louisiana Pay Day Loan outstanding on the Closing Date, multiplied by
(ii) 90%.
"LP Interests" means the limited partnership interests held
------------
by the Limited Partners in U.S. Check.
"Material Adverse Change" means any material adverse change
-----------------------
in the business, properties, results of operations, prospects or
condition (financial or otherwise) of, the Companies taken as a whole.
"Material Contracts" shall have the meaning ascribed to such
------------------
term in Section 4.15 hereof.
"Minimum Lease Condition" shall have the meaning ascribed to
-----------------------
such term in Section 10.14 hereof.
"Multiemployer Plans" shall have the meaning ascribed to
-------------------
such term in Section 4.16(a) hereof.
"Multiple Employer Plans" shall have the meaning ascribed to
-----------------------
such term in Section 4.16(a) hereof.
"Noncompetition Agreement" shall have the meaning ascribed
------------------------
to such term in Section 4.2 hereof.
"Order" means any order, injunction, judgment, decree,
-----
ruling, writ, assessment or arbitration award.
"Partnership Interests" means the general partnership
---------------------
interest held by Any Kind in U.S. Check and the LP Interests,
collectively.
<PAGE>
"Pay Day Loans" means (i) any arrangement (including any
-------------
schedule or amendment thereto or assignment, assumption, renewal or
novation thereof) in existence as of the Closing and any agreements
relating thereto which is evidenced, in whole or in part, by a post-
dated check made payable to either Company and (ii) any restructuring,
modification or extension of any Pay Day Loan of the type described in
Clause (i) hereof.
"Permits" means any approvals, authorizations, consents,
-------
Licenses, permits or certificates.
"Permitted Exceptions" means (i) statutory liens for current
--------------------
taxes, assessments or other governmental charges not yet delinquent or
the amount or validity of which is being contested in good faith by
appropriate proceedings, provided an appropriate reserve is
established therefor; (ii) mechanics', carriers', workers', repairers'
and similar Liens arising or incurred in the ordinary course of
business that are not material to the business, operations and
financial condition of the property so encumbered or the Companies;
(iii) zoning, entitlement and other land use and environmental
regulations by any Governmental Body, provided that such regulations
have not been violated; and (iv) such other imperfections in title,
charges, easements, restrictions and encumbrances which do not
materially detract from the value of or materially interfere with the
present use of any Company Property subject thereto or affected
thereby.
"Person" means any individual, corporation, partnership,
------
firm, joint venture, association, joint-stock company, trust,
unincorporated organization, Governmental Body or other entity.
"Personal Property Lease" shall have the meaning ascribed to
-----------------------
such term in Section 4.13(a) hereof.
"Pre-Closing Allocation of Expenses" shall have the meaning
----------------------------------
ascribed to such term in Section 1.4(b) hereof.
"Property Contracts" shall have the meaning ascribed to such
------------------
term in Section 4.12(a) hereof.
"Purchase Price" shall have the meaning ascribed to such
--------------
term in Section 2.1 hereof.
"Purchaser" shall have the meaning ascribed to such term in
---------
the introductory paragraph hereto.
"Purchaser Documents" shall have the meaning ascribed to
-------------------
such term in Section 5.2 hereof.
<PAGE>
"Purchaser Indemnified Parties" shall have the meaning
-----------------------------
ascribed to such term in Section 9.2(a) hereof.
"Qualified Plans" shall have the meaning ascribed to such
---------------
term in Section 4.16(c) hereof.
"Rawle Entities" mean any of Richard Rawle, Jon Todd Rawle,
---------------
Richard Tracy Rawle, Tosh Rawle, Lonnie Hayword, Liberty, Inc., Any
Kind Check Cashing I, Any Kind of Checks Cashed, Classique Financial
Exchange, Inc., Elite Financial Exchange, Inc. and Tosh, Inc.
"Real Property Lease" shall have the meaning ascribed to
-------------------
such term in Section 4.12(a) hereof.
"Reimbursable Security Deposits" shall have the meaning
------------------------------
ascribed to such term in Section 1.4(a) hereof.
"Release" means any release, spill, emission, leaking,
-------
pumping, pouring, dumping, injection, deposit, disposal, discharge,
dispersal, leaching or migration into the indoor or outdoor
environment, or into or out of any property;
"Remedial Action" means all actions, including, without
---------------
limitation, any capital expenditures required, to (w) clean up,
remove, treat or in any other way address any Hazardous Material; (x)
prevent the Release or threat of Release of any Hazardous Material so
it does not endanger or threaten to endanger public health or welfare
or the indoor or outdoor environment; (y) perform pre-remedial studies
and investigations or post-remedial monitoring and care; or (z) bring
any facility owned, operated or leased by any Company and the
operations thereon into compliance with Environmental Laws.
"Representatives" shall have the meaning ascribed to such
---------------
term in Section 6.5 hereof.
"Securities Act" shall have the meaning ascribed to such
--------------
term in Section 4.30 hereof.
"Seller Documents" shall have the meaning ascribed to such
----------------
term in Section 4.2 hereof.
"Seller Indemnified Parties" shall have the meaning ascribed
--------------------------
to such term in Section 9.2(d) hereof.
"Seller Releases" shall have the meaning ascribed to such
---------------
term in Section 6.11 hereof.
<PAGE>
"Sellers" shall mean the Shareholders and the Limited
-------
Partners.
"Sellers' Representative" shall have the meaning ascribed to
-----------------------
such term in Section 10.13 hereof.
"Shareholder" shall have the meaning ascribed to such term
-----------
in the introductory paragraph hereto.
"Shareholders Agreement" means that certain amended and
----------------------
restated shareholders agreement, substantially in the form of Exhibit
B hereto.
"Shares" shall have the meaning ascribed to such term in the
------
recitals hereto.
"Statement" shall have the meaning ascribed to such term in
---------
Section 6.13(a)(iii) hereof.
"Stores" shall have the meaning ascribed to such term in the
------
recitals hereto.
"Subsidiary" means any Person of which a majority of the
----------
outstanding voting securities or other voting equity interests are
owned, directly or indirectly, and any partnership of which a general
partnership or other interest representing a majority of interest in
profits or capital is owned by either Company, but in no event shall
U.S. Check be deemed a Subsidiary of Any Kind.
"Taxes" means all taxes, charges, fees, levies, imposts,
-----
duties, and other assessments, including but not limited to any
income, alternative minimum or add-on tax, estimated, gross income,
gross receipts, sales, use, transfer, gains, transactions,
intangibles, ad valorem, value-added, franchise, registration, title,
license, capital, paid-up capital, profits, withholding, payroll,
employment, excise, severance, stamp, occupation, premium, recording,
real property, personal property, Federal highway use, commercial
rent, environmental, windfall profit tax, custom, duty or other tax,
governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest, penalties, or additions to
tax, and any interest or penalties imposed with respect to the filing,
obligation to file or failure to file any Tax Return.
"Tax Return" means any return, declaration, report, claim
----------
for refund, information return, statement, or other similar document
relating to Taxes, including any schedule or attachment thereto, and
including any amendment thereof.
<PAGE>
"Updated Schedules" shall have the meaning ascribed to such
-----------------
term in Section 2.6 hereof.
"U.S. Cash on Hand" means all cash in U.S. Currency
-----------------
physically located in any of the Stores as of the opening of business
at the Stores on the Closing Date.
"U.S. Check" shall have the meaning ascribed to such term in
----------
the introductory paragraph hereto.
"U.S. Check Assets" shall have the meaning ascribed to such
-----------------
term in Section 1.1 hereof.
"U.S. Currency" means the lawful money (including coins and
-------------
currency) of the United States of America.
"U.S. Currency Equivalent" shall have the meaning ascribed
------------------------
to such term in Section 2.4 hereof.
"Western Union Guaranteed Growth Plan Amount" means
-------------------------------------------
$43,184.58.
10.2 Expenses. Except as otherwise provided in this
--------
Agreement, the Sellers and the Purchaser shall each bear their own
expenses incurred in connection with the negotiation and execution of
this Agreement and each other agreement, document and instrument
contemplated by this Agreement and the consummation of the
transactions contemplated hereby and thereby, it being agreed that Any
Kind may bear any of such costs and expenses solely out of cash that
is an Excluded Asset.
10.3 Specific Performance. The Sellers acknowledge and
--------------------
agree that the breach of this Agreement would cause irreparable damage
to the Purchaser and that the Purchaser will not have an adequate
remedy at law. Therefore, the obligations of the Sellers under this
Agreement, including, without limitation, the Sellers' obligation to
sell the Shares and LP Interests to the Purchaser, shall be
enforceable by a decree of specific performance issued by any court of
competent jurisdiction, and appropriate injunctive relief may be
applied for and granted in connection therewith. Such remedies shall,
however, be cumulative and not exclusive and shall be in addition to
any other remedies which any party may have under this Agreement or
otherwise.
10.4 Further Assurances. Each of the Sellers and the
------------------
Purchaser agrees to execute and deliver such other documents or
agreements and to take such other action as may be reasonably
necessary or desirable for the implementation of this Agreement and
the consummation of the transactions contemplated hereby.
<PAGE>
10.5 Arbitration. Any controversy arising under, out of,
-----------
in connection with, or relating to, this Agreement, and any amendment
hereof, or the breach hereof, shall be determined and settled by
arbitration in Maricopa County, Arizona, by a person or persons
mutually agreed upon, or in the event of a disagreement as to the
selection of the arbitrator or arbitrators, in accordance with the
rules of the American Arbitration Association. Any award rendered
therein shall specify the findings of fact of the arbitrator or
arbitrators and the reasons for such award, with the reference to and
reliance on relevant law. Any such award shall be final and binding
on each and all of the parties thereto and their personal
representatives, and judgment may be entered thereon in any court
having jurisdiction thereof and the fees of such arbitrators in
connection with the determination shall be paid by the party against
whom the award was made, or if a compromise was made, shared equally.
10.6 Entire Agreement; Amendments and Waivers
----------------------------------------
Confidentiality. This Agreement (including the schedules and exhibits
---------------
hereto), and paragraph 14 from that letter, dated January 31, 1996,
addressed to Mr. George H. Brimhall from Jeffrey A. Weiss on behalf of
Dollar Financial Group, Inc. represent the entire understanding and
agreement between the parties hereto with respect to the subject
matter hereof and can be amended, supplemented or changed, and any
provision hereof can be waived, only by written instrument making
specific reference to this Agreement signed by the party against whom
enforcement of any such amendment, supplement, modification or waiver
is sought; provided, however, the provisions of such paragraph 14
-------- -------
shall expire on the Closing Date. No action taken pursuant to this
Agreement, including without limitation, any investigation by or on
behalf of any party, shall be deemed to constitute a waiver by the
party taking such action of compliance with any representation,
warranty, covenant or agreement contained herein. The waiver by any
party hereto of a breach of any provision of this Agreement shall not
operate or be construed as a further or continuing waiver of such
breach or as a waiver of any other or subsequent breach. No failure
on the part of any party to exercise, and no delay in exercising, any
right, power or remedy hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of such right, power or
remedy by such party preclude any other or further exercise thereof or
the exercise of any other right, power or remedy. All remedies
hereunder are cumulative and are not exclusive of any other remedies
provided by law.
10.7 Governing Law. This Agreement shall be governed by
-------------
and construed in accordance with the laws of the State of Arizona
without giving effect to principles of conflicts of law.
<PAGE>
10.8 Counterparts. This Agreement may be executed in one
------------
or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
10.9 Table of Contents and Headings. The table of contents
------------------------------
and section headings of this Agreement are for reference purposes only
and are to be given no effect in the construction or interpretation of
this Agreement.
10.10 Notices. All notices and other communications
-------
under this Agreement shall be in writing and shall be deemed given
when delivered personally or mailed by certified mail, return receipt
requested, to the parties (and shall also be transmitted by facsimile
to the Persons receiving copies thereof) at the following addresses
(or to such other address as a party may have specified by notice
given to the other party pursuant to this provision):
If to Purchaser or, after the Closing, Any Kind or U.S. Check:
c/o Dollar Financial Group, Inc.
Daylesford Plaza, Suite 210
1436 Lancaster Avenue
Berwyn, Pennsylvania 19312
Attention: Donald F. Gayhardt, Vice President - Corporate
Development
Telephone No.: (610) 296-3400
Telecopy No.: (610) 296-7844
with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York
Attention: William M. Gutowitz, Esq.
Telephone No.: (212) 310-8000
Telecopy No.: (212) 310-8007
If to any Seller prior to the Closing:
Any Kind Check Cashing Centers, Inc.
10900 East 183rd Street
Cerritos, California 90703
Attention: Richard Anderson
Telephone No.: (310) 809-0737
Telecopy No.: (310) 809-0621
<PAGE>
with a copy to:
GNS Development Corp.
10555 East Firestone Boulevard
Norwalk, California 90650
Attention: Lee Buttle
Telephone No.: (310) 868-9956
Telecopy No.: (310) 863-6709
If to any Seller after the Closing:
George H. Brimhall
9211 North Martingale
Paradise Valley, AZ 85253
Telephone No.: (602) 951-2444
Telecopy No.: (602) 991-8444
with a copy to:
GNS Development Corp.
10555 East Firestone Boulevard
Norwalk, California 90650
Attention: Leland Buttle
Telephone No.: (310) 868-9956
Telecopy No.: (310) 863-6709
Any party may by notice change the address to which notice or other
communications to it are to be delivered or mailed.
10.11 Severability. If any provision of this Agreement
------------
is invalid or unenforceable, the balance of this Agreement shall
remain in effect.
10.12 Binding Effect; Assignment. This Agreement shall
--------------------------
be binding upon and inure to the benefit of the parties and their
respective successors and permitted assigns. Nothing in this
Agreement shall create or be deemed to create any third party
beneficiary rights in any person or entity not a party to this
Agreement except as provided below. No assignment of this Agreement
or of any rights or obligations hereunder may be made by any party
hereto without the prior written consent of the other parties hereto
and any attempted assignment without the required consents shall be
void; provided, however, that the Purchaser may assign this Agreement
-------- -------
and any or all rights hereunder (including, without limitation, the
Purchaser's rights to purchase the Shares and LP Interests and the
Purchaser's rights to seek indemnification hereunder) to (i) any
Affiliate of the Purchaser or (ii) after the Closing, to any purchaser
or transferee of any
<PAGE>
of the stock or assets of Any Kind or any of the LP Interests or U.S.
Check Assets. Upon any such permitted assignment, the references in
this Agreement to the Purchaser shall also apply to any such assignee
unless the context otherwise requires.
10.13 Sellers' Representative. Subject to the terms of
-----------------------
that certain Sellers' Representative Agreement dated of even date
herewith, George H. Brimhall ("Brimhall") is hereby irrevocably
designated and authorized by each of the Sellers, as their
representative (the "Sellers' Representative") to act for and
represent the Sellers with respect to all matters arising out of
Article IX hereof and in those other matters with respect to which
this Agreement specifies that the Sellers' Representative shall or may
act, as well as matters which require or permit notice to be given to
any of the Sellers under this Agreement, and by his execution and
delivery of this document, George H. Brimhall hereby accepts such
designation and agrees to act as the Sellers' Representative with
respect to all matters arising out of Article IX hereof and in those
other matters with respect to which this Agreement specifies that the
Sellers' Representative shall or may act, as well as matters which
require or permit notice to be given to any of the Sellers under this
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first written above.
DOLLAR FINANCIAL GROUP, INC.
By: /s/ Jeffrey A. Weiss
------------------------------------------
Jeffrey A. Weiss
Chairman of the Board,
President and CEO
DFG HOLDINGS, INC.
By: /s/ Jeffrey A. Weiss
------------------------------------------
Jeffrey A. Weiss
Chairman of the Board,
President and CEO
<PAGE>
ANY KIND CHECK CASHING CENTERS, INC.
By:/s/ George H. Brimhall
-------------------------
George H. Brimhall, President
/s/ George H. Brimhall
----------------------
George H. Brimhall, Individually and
as the Sellers' Representative
GHB Charitable Trust #1
By:/s/ Lynn R. Stratford
------------------------
Lynn R. Stratford, Trustee
GHB Charitable Trust #2
By:/s/ Lynn R. Stratford
------------------------
Lynn R. Stratford, Trustee
/s/ Leland Buttle
-----------------
Leland Buttle
/s/ Jeffrey Brooks
------------------
Jeffrey Brooks
WLBR Trust
By:/s/ Stephen K. Brimhall
--------------------------
Stephen K. Brimhall, Trustee
<PAGE>
SMBR Trust
By:/s/ Stephen K. Brimhall
--------------------------
Stephen K. Brimhall, Trustee
SKBR Trust
By:/s/ Leland J. Buttle
-----------------------
Leland J. Buttle, Trustee
Brimhall Children's Trust FBO
Wells A. Brimhall
By:/s/ Stephen K. Brimhall
--------------------------
Stephen K. Brimhall, Trustee
Brimhall Children's Trust FBO
Joy Brimhall
By:/s/ Stephen K. Brimhall
--------------------------
Stephen K. Brimhall, Trustee
Brimhall Children's Trust FBO
Grant E. Brimhall
By:/s/ Stephen K. Brimhall
--------------------------
Stephen K. Brimhall, Trustee
Brimhall Children's Trust FBO
Shelly Brimhall
By:/s/ Stephen K. Brimhall
--------------------------
Stephen K. Brimhall, Trustee
Brimhall Children's Trust FBO
Ryan A. Brimhall
By:/s/ Stephen K. Brimhall
--------------------------
Stephen K. Brimhall, Trustee
<PAGE>
WSBR Trust
By:/s/ Leland J. Buttle
-----------------------
Leland J. Buttle, Trustee
MJBR Trust
By:/s/ Leland J. Buttle
-----------------------
Leland J. Buttle, Trustee
U.S. CHECK EXCHANGE LIMITED PARTNERSHIP,
AN ARIZONA LIMITED PARTNERSHIP
By: ANY KIND CHECK CASHING CENTERS,
INC., its General Partner
By:/s/ George H. Brimhall
-------------------------
George H. Brimhall, President
LRS Unitrust #3
By:/s/ Lynn R. Stratford
------------------------
Lynn R. Stratford, Trustee
Marilyn Stratford Unitrust
By:/s/ Marilyn Stratford
------------------------
Marilyn Stratford, Trustee
/s/ Cal S. Volkert
------------------
Cal S. Volkert
<PAGE>
LCS Unitrust
By:/s/ Larry C. Stratford, Trustee
----------------------------------
Larry C. Stratford, Trustee
CBS Unitrust
By:/s/ Carolyn B. Stratford, Trustee
------------------------------------
Carolyn B. Stratford, Trustee
/s/ Charlene Stratford
----------------------
Charlene Stratford
AMM Development Corporation
By:/s/ Thomas F. Clark
----------------------
Name: Thomas F. Clark
Title: President
/s/ Leland Buttle
-----------------
Leland Buttle
Exhibit 10.11
<PAGE>
AMENDED AND RESTATED
PURCHASE AGREEMENT
BY AND AMONG
DOLLAR FINANCIAL CANADA LTD.
(FORMERLY KNOWN AS
705532 ALBERTA LTD.)
AS PURCHASER,
DFG HOLDINGS INC.
AND
NATIONAL MONEY MART INC.,
AND
STEPHEN A . CLARK, MARK MCDONALD, 698815 ALBERTA LTD.,
TRI-S INVESTMENTS LTD.
AND
BETSYN CLARK
Dated as of October 23, 1996
<PAGE>
TABLE OF CONTENTS
-----------------
Section Pages
------- -----
ARTICLE I 2
SALE AND PURCHASE OF SHARES 2
1.1 Sale and Purchase of Shares 2
1.2 National Assets 3
1.3 Excluded Assets 5
1.4 Liabilities 5
1.5 Tri-S Assets 5
ARTICLE II 6
PURCHASE AND PAYMENT 6
2.1 Amount of Purchase Price 6
2.2 Payment of Cash 6
2.3 [Intentionally Omitted] 6
2.4 Initial Calculation on Closing Date 6
2.5 Post-Closing Adjustments 7
ARTICLE III 9
CLOSING AND TERMINATION 9
3.1 Closing Date 9
3.2 Termination of Agreement 9
3.3 Procedure Upon Termination 10
3.4 Effect of Termination 10
<PAGE>
Section Pages
------- -----
ARTICLE IV 10
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS 10
4.1 Organization and Good Standing 10
4.2 Authorization of Agreement 11
4.3 Capitalization 11
4.4 Subsidiaries and Other Interests 12
4.5 Corporate Records 13
4.6 Conflicts; Consents of Third Parties 13
4.7 Ownership and Transfer of Shares 14
4.8 Financial Statements 14
4.9 No Undisclosed Liabilities 15
4.10 Absence of Certain Developments 15
4.11 Taxes 17
4.12 Real Property 22
4.13 Tangible Personal Property 24
4.14 Intangible Property 25
4.15 Material Contracts 25
4.16 Employee Benefits 27
4.17 Labor 28
4.18 Employment Matters 29
4.19 Litigation 30
4.20 Compliance with Laws 30
4.21 Environmental Matters 30
4.22 Insurance 32
<PAGE>
Section Pages
------- -----
4.23 Payables 32
4.24 Related Party Transactions 32
4.25 Banks 33
4.26 Financial Advisors 33
4.27 Franchise Operations 33
4.28 Name 33
4.29 Investment Intention 33
4.30 Accounts Receivable 35
4.31 [Intentionally Omitted] 35
4.32 No Bankruptcy 35
4.33 Minority Equity Interests 35
4.34 Absence of Activity 35
4.35 No Misrepresentation 36
ARTICLE V 36
REPRESENTATIONS AND WARRANTIES OF PURCHASER 36
5.1 Organization and Good Standing 36
5.2 Authorization of Agreement 36
5.3 Conflicts; Consents of Third Parties 37
5.4 Litigation 37
5.5 Investment Intention 37
5.6 Financial Advisors 37
ARTICLE VI 38
COVENANTS 38
6.1 Access to Information 38
<PAGE>
Section Pages
------- -----
6.2 Conduct of the Business Pending the Closing 38
6.3 Consents 42
6.4 Consents to Real Property Leases 42
6.5 No Solicitation 43
6.6 Preservation of Records 43
6.7 Publicity 44
6.8 Repayment of Loans 44
6.9 Use of Name 44
6.10 Environmental Matters 44
6.11 Non-Competition Agreements 44
6.12 Shareholder Releases 45
6.13 Capital Contribution 45
6.14 Tax Matters 45
6.15 Transfer to Alberta 48
6.16 Obligations of Tri-S 48
6.17 Transfer to Mrs. Clark 48
ARTICLE VII 48
CONDITIONS TO CLOSING 48
7.1 Conditions Precedent to Obligations of Purchaser 48
7.2 Conditions Precedent to Obligations of the
Shareholders and the Tri-S Shareholders 51
ARTICLE VIII 52
DOCUMENTS TO BE DELIVERED 52
8.1 Documents to be Delivered by the Shareholders and the
Tri-S Shareholders 52
<PAGE>
Section Pages
------- -----
8.2 Documents to be Delivered by the Purchaser 54
ARTICLE IX 54
INDEMNIFICATION 54
9.1 Survival 54
9.2 General Indemnification 55
9.3 Limitations on Indemnification for Breaches of
Representations and Warranties 57
9.4 Indemnification Procedures 57
9.5 Tax Matters 59
9.6 Employee Benefits and Labor Indemnity 60
9.7 Waiver of Subrogation and Other Rights 60
9.8 Right of Offset 60
9.9 Treatment of Payment 60
ARTICLE X 61
MISCELLANEOUS 61
10.1 Certain Definitions 61
10.2 Payment of Sales, Use or Similar Taxes 72
10.3 Expenses 72
10.4 Specific Performance 72
10.5 Further Assurances 73
10.6 Submission to Jurisdiction; Consent to Service of
Process 73
10.7 Entire Agreement; Amendments and Waivers
Confidentiality 73
10.8 Governing Law 74
10.9 Table of Contents and Headings 74
<PAGE>
Section Pages
------- -----
10.10 Notices 74
10.11 Severability 75
10.12 Binding Effect; Assignment 75
10.13 Shareholders' Representative 76
10.14 Western Union Bonus 76
10.15 Counterparts 77
ARTICLE XI 77
REPRESENTATIONS AND WARRANTIES OF DFG 77
11.1 Organization and Good Standing 77
11.2 Authorization of Agreement 77
11.3 Capitalization 78
11.4 Corporate Records 78
11.5 Conflicts; Consents of Third Parties 78
11.6 Financial Statements 79
11.7 No Undisclosed Liabilities 79
11.8 Absence of Certain Developments 80
11.9 Labor 80
11.10 Litigation 80
11.11 Compliance with Laws 81
11.12 No Bankruptcy 81
11.13 Taxes 81
11.14 No Misrepresentation 82
<PAGE>
Section Pages
------- -----
ARTICLE XII 82
REPRESENTATIONS AND WARRANTIES OF THE TRI-S SHAREHOLDERS 82
12.1 Organization and Good Standing 82
12.2 Authorization of Agreement 83
12.3 Capitalization 83
12.4 Absence of Activity 84
12.5 Corporate Records 84
12.6 Conflicts; Consents of Third Parties 85
12.7 Ownership and Transfer of Shares 85
12.8 Financial Statements 85
12.9 Taxes 86
12.10 Litigation 90
12.11 Compliance with Laws 91
12.12 Related Party Transactions 91
12.13 Financial Advisors 91
12.14 No Bankruptcy 91
12.15 No Misrepresentation 91
<PAGE>
PURCHASE AGREEMENT
------------------
THIS AMENDED AND RESTATED PURCHASE AGREEMENT, dated as of
October 23, 1996 (the "Agreement"), by and among Dollar Financial
Canada Ltd. (formerly known as 705532 Alberta Ltd.), an Alberta
corporation (the "Purchaser"), DFG Holdings Inc., a Delaware
corporation ("DFG"), and National Money Mart Inc., an Alberta
corporation ("National"), and Stephen A. Clark, Mark McDonald, and
698815 Alberta Ltd., an Alberta Corporation ("Alberta") (individually,
a "Shareholder" and collectively, the "Shareholders") and Tri-S
Investments Ltd. ("Tri-S"), an Alberta corporation and Betsyn Clark
("Mrs. Clark" and, together with Tri-S, individually a "Tri-S
Shareholder" and collectively, the "Tri-S Shareholders").
W I T N E S S E T H:
-------------------
WHEREAS, National presently owns and operates thirty six
(36) check cashing stores (the "Stores"), and franchises one hundred
six (106) check cashing stores, at the locations in Canada listed on
Schedule I;
WHEREAS, (i) as of the Closing the Shareholders will own an
aggregate of 6,208 shares of Common Stock (as hereinafter defined),
and Mrs. Clark will own an aggregate of 2,500 shares of Common Stock
(together, the "Seller Shares"), and (ii) Tri-S owns an aggregate of
1,292 shares of Common Stock (the "Other Shares" and, together with
the Seller Shares, the "National Shares");
WHEREAS, the National Shares constitute all of the issued
and outstanding shares of capital stock of National;
WHEREAS, Mrs. Clark owns an aggregate of 100 shares of
Common Stock, without par value of Tri-S (the "Tri-S Shares" and,
together with the National Shares, the "Shares"), which Tri-S Shares
constitute all of the issued and outstanding shares of capital stock
of Tri-S;
WHEREAS, Purchaser desires to purchase from (i) the
Shareholders and Mrs. Clark, and the Shareholders and Mrs. Clark
desire to sell to Purchaser, the Seller Shares, and (ii) Mrs. Clark,
and Mrs. Clark desires to sell to Purchaser, the Tri-S Shares, all for
the Purchase Price and upon the terms and conditions hereinafter set
forth;
<PAGE>
WHEREAS, Purchaser desires that, effective upon the Closing
Date, each of the Shareholders and Mrs. Clark will agree not to
compete with Purchaser or any of its affiliates pursuant to separate
Non-Competition Agreements to be entered into on the Closing Date in
substantially the form set forth on Exhibit A hereto;
WHEREAS, Purchaser is an indirect, wholly-owned subsidiary
of DFG;
WHEREAS, certain terms used in this Agreement are defined in
Section 10.1;
WHEREAS, the Purchaser, DFG, National, the Shareholders
(other than Alberta) and the Tri-S Shareholders have entered into a
Purchase Agreement dated as of October 23, 1996 (the "Prior
Agreement"); and
WHEREAS, the Purchaser, DFG, National, the Shareholders and
the Tri-S Shareholders have agreed to amend certain provisions
contained in the Prior Agreement, including, without limitation,
adding Alberta as a party to this Agreement and providing for the
purchase of the Tri-S Shares;
NOW, THEREFORE, in consideration of the premises and the
mutual representations, warranties, covenants and agreements
hereinafter set forth, and upon the terms and subject to the
conditions hereinafter set forth, the Purchaser, DFG, National, the
Shareholders and the Tri-S Shareholders hereby agree that the Prior
Agreement is hereby amended and restated to read in its entirety as
follows:
ARTICLE I
SALE AND PURCHASE OF SHARES
1.1 Sale and Purchase of Shares.
---------------------------
(a) Upon the terms and subject to the conditions contained
herein, on the Closing Date the Shareholders and Mrs. Clark shall
sell, assign, transfer, convey and deliver to the Purchaser (or its
designees) good and marketable title, free and clear of all Liens, and
the Purchaser shall purchase from the Shareholders and Mrs. Clark, the
Seller Shares.
(b) Upon the terms and subject to the conditions contained
herein, on the Closing Date Mrs. Clark shall sell,
<PAGE>
assign, transfer, convey and deliver to the Purchaser (or its
designees) good and marketable title, free and clear of all Liens, and
the Purchaser shall purchase from Mrs. Clark, the Tri-S Shares.
(c) In addition, from and after the Closing, each of the
Shareholders and Mrs. Clark agrees to provide, or cause to be
provided, to Purchaser, National and Tri-S access to all documents
and/or information as may be reasonably necessary to enable each of
them to see to the efficient and proper conduct and administration of
the assets owned by National (the "Assets") and the assets owned by
Tri-S, including, without limitation, all historical files, Tax
Returns, records and personnel data.
1.2 National Assets. Without limiting the foregoing, the
---------------
Shareholders and Mrs. Clark agree that, at the time of the Closing (as
hereinafter defined), all of the following, other than the Excluded
Assets, shall be owned by National and its Subsidiaries, free and
clear of all Liens except for the Permitted Exceptions:
(a) Licenses and Authorizations. All authorizations,
---------------------------
approvals, orders, licenses, franchises, certificates and permits
(collectively, "Licenses") of and from all Governmental Bodies
necessary to own or lease the properties and assets used or useable in
the ownership and/or operation of the Stores, and to otherwise conduct
the business of National and its Subsidiaries conducted by it prior to
the date hereof other than with respect to the Excluded Assets (the
"Business") together with any renewals, extensions or modifications
thereof and additions thereto and other pending applications or
applications to be filed with any Governmental Body between the date
of this Agreement and the Closing Date.
(b) Cash, Accounts Receivable, Minority Equity Interests,
-----------------------------------------------------
etc. All cash, savings accounts, checks returned unpaid, accounts
----
receivable, notes receivable, refunds of unearned insurance premiums,
bank deposits and similar items in the process of collection owned or
otherwise held by National on the Closing Date, and the Minority
Equity Interests set forth on Schedule 4.4 (b). For purposes of this
Agreement (including, without limitation, the calculation of the
Purchase Price pursuant to Article II hereof), all accounts receivable
that are 90 days or more past due (the "Discount Receivables") shall
be deemed to have been written-down to zero.
(c) Other Personal Property, etc. All tangible and
-----------------------------
intangible personal or moveable property, equipment, machinery,
<PAGE>
furniture, fixtures, tools, computer hardware, supplies and other
assets, wherever located, used or useable in the ownership and/or
operation of the Stores and the Business, together with such
additions, modifications and replacements thereto, and subject to
deletions therefrom in connection with any such replacements, as may
be made in accordance with the terms of this Agreement and in the
ordinary course of business between the date of this Agreement and the
Closing Date.
(d) Real Property. All leased real or immovable property,
-------------
buildings and structures, leasehold improvements, fixtures and
appurtenances used or useable in the operation of National and its
Subsidiaries (including all Company Properties) and their interests
and rights arising under all agreements, rights and appurtenances
relating thereto (including all Real Property Leases), any renewals,
extensions, amendments or modifications thereof, and any additional
agreements and leases made or entered into in accordance with the
terms of this Agreement and in the ordinary course of business between
the date of this Agreement and the Closing Date.
(e) Leases and Agreements. All contracts and agreements
---------------------
used or useable in the ownership and/or operation of the Stores and
the Business, including any renewals, extensions, amendments or
modifications thereof, and any additional agreements, leases,
commitments and orders made or entered into in accordance with the
terms of this Agreement between the date of this Agreement and the
Closing Date.
(f) Intellectual Property, Etc. All patents, patent
---------------------------
licenses, copyrights, trademarks, trade names, service marks, trade
secret rights, computer programs and software, permits, licenses or
other similar rights used or useable in the ownership and/or operation
of the Stores and the Business, including, specifically, the
tradenames enumerated on Schedule 4.14 hereof, together with any
additions or modifications thereto and subject to any deletions
therefrom made in accordance with the terms of this Agreement between
the date of this Agreement and the Closing Date. The term "computer
programs and software" as used in this subparagraph (f) shall include,
without limitation, all point-of-sale ("POS") software developed
and/or owned by National and its Subsidiaries.
(g) Books and Records. All books, records and files
-----------------
pertaining to the Stores and the Business for all periods ending on or
before the Closing Date, including National's and its Subsidiaries'
minute books and stock register.
<PAGE>
(h) Prepaid Expenses. All security deposits and other
----------------
prepaid expenses relating to the operation and/or ownership of the
Stores and the Business, including, but not limited to, Taxes, rent,
licenses, postage and any other prepaid assets or deposits relating to
the operation and/or ownership of the Stores existing as of the
Closing Date.
(i) Customer Lists. All customer lists, vendor lists and
--------------
other intangible assets relating to the operation and/or ownership of
the Stores and the Business, together with any additions or
modifications thereto and subject to any deletions therefrom made in
accordance with the terms of this Agreement between the date of this
Agreement and the Closing Date.
1.3 Excluded Assets. It is agreed that the assets set
---------------
forth on Schedule 1.3 (collectively, the "Excluded Assets") shall not
constitute part of the Assets. The Excluded Assets shall be
transferred by National to the Shareholders prior to Closing, in the
manner described on Schedule 1.3.
1.4 Liabilities. Purchaser shall, following Closing,
-----------
cause National and each of its Subsidiaries, as applicable, to perform
and discharge its obligations under the Assumed Contracts to which it
is a party, to the extent such obligations arise and accrue after the
Closing Date (excluding, however, those obligations that either arise
out of or would have been satisfied prior to the Closing but for a
breach or default by National or any of its Subsidiaries)
(collectively, the "Contract Liabilities"). The Shareholders and the
Tri-S Shareholders agree that prior to the Closing Date (i) they shall
cause National and its Subsidiaries to satisfy and discharge all of
its obligations and liabilities for amounts due or to become due for
services rendered or goods delivered to National or any of its
Subsidiaries prior to Closing, and (ii) they shall use, and cause
National and its Subsidiaries to use, their respective best efforts to
obtain a discharge or release of National and its Subsidiaries as of
the Closing, from any and all obligations, liabilities or expenses
other than the Contract Liabilities. Without limiting the generality
of the foregoing and without limiting Article IX below, and regardless
of whether any of the following may be disclosed to Purchaser pursuant
to Section 4 hereof or otherwise, or whether Purchaser may have
knowledge of the same, the Shareholders will be liable for and will
pay and indemnify National and Purchaser in respect of the Excluded
Liabilities.
1.5 Tri-S Assets. Without limiting the foregoing, the
------------
Shareholders and the Tri-S Shareholders covenant and agree
<PAGE>
that, at the time of the Closing, (i) the only assets of Tri-S shall
be the Other Shares (which shall be held by Tri-S, free and clear of
all Liens), and (ii) Tri-S shall have no liabilities or obligations
(matured or unmatured, fixed or contingent) of any nature whatsoever.
ARTICLE II
PURCHASE AND PAYMENT
2.1 Amount of Purchase Price. The purchase price for the
------------------------
Seller Shares and the Tri-S Shares (the "Purchase Price") shall be an
amount equal to (i) the sum of (a) C$24,140,029.00, (b) the Cash on
Hand, (c) the Closing Date Accounts Receivable, (d) Prepaids, and (e)
MEI Interest less (ii) the sum of (w) Accounts Payable, (x) Bonuses,
(y) Dividends and (z) Shareholder Loans. The Purchase Price is
subject to adjustment as provided in this Agreement, and shall be paid
in the manner set forth in Section 2.2(b) below. 87.08% of the
Purchase Price shall be allocable to the purchase and sale of the
Seller Shares and 12.92% of the Purchase Price shall be allocable to
the purchase and sale of the Tri-S Shares.
2.2 Payment of Cash. (a) On the Closing Date and subject
---------------
to the terms and conditions of this Agreement, the Purchaser shall pay
to the Shareholders' Representative the Purchase Price less C$700,000
in cash by certified or bank cashier's check in New York Clearing
House Funds, payable to the order of the Shareholders' Representatives
(or, at the Shareholders' Representative option, by wire transfer of
immediately available funds into an account designated, prior to the
Closing, by the Shareholders' Representative).
(b) Upon the Closing, and subject to the terms and
conditions of this Agreement, the Purchaser shall pay to Mark McDonald
and Alberta 139.19 and 185.58 shares, respectively, of DFG Common
Stock.
2.3 [Intentionally Omitted]
2.4 Initial Calculation on Closing Date. Notwithstanding
-----------------------------------
any terms or provisions of this Agreement to the contrary, the
following components of the Purchase Price payment that is made on the
actual Closing Date shall be based upon National's October 31, 1996
internally prepared unaudited financial statements: (i) the amount of
Cash on Hand at National and each of its Subsidiaries, (ii) the
Closing Date Accounts
<PAGE>
Receivable, (iii) the amount of Prepaids, (iv) the amount of MEI
Interests and (v) the amount of Accounts Payable, Bonuses and
Shareholder Loans .
2.5 Post-Closing Adjustments. (a) Purchaser shall
------------------------
prepare and deliver to Shareholder's Representative, as promptly as
practicable after the Closing Date, versions (based on audited
consolidated financial statements (prepared in accordance with GAAP
consistently applied) for National for the fiscal year ending on the
Closing Date; the "Closing Date Financial Statements") of: Schedules
for (i) the Cash on Hand, (ii) the Closing Date Accounts Receivable,
(iii) Prepaids, (iv) MEI Interests, (v) Accounts Payable, (vi)
Bonuses, (vii) Dividends and (viii) Shareholders Loans (collectively,
the "Updated Schedules"), all of which shall be dated as of the
Closing Date. The cost of preparing and delivering the Updated
Schedules and the Closing Date Financial Statements shall be shared
equally between (i) the Shareholders and (ii) the Purchaser.
(b) The Purchase Price shall be increased dollar for
dollar by an amount equal to: (i) any increase in the Cash on Hand (as
calculated pursuant to Section 2.4) as compared to Cash on Hand on the
Closing Date Financial Statements, (ii) any increase in the Closing
Date Accounts Receivable (as calculated pursuant to Section 2.4) as
compared to the Closing Date Accounts Receivable on the Closing Date
Financial Statements, (iii) any increase in Prepaids (as calculated
pursuant to Section 2.4) as compared to the Prepaids on the Closing
Date Financial Statements, (iv) any increase in MEI Interests as
compared to the MEI Interests on the Closing Date Financial
Statements, (v) any decrease in Accounts Payable (as calculated
pursuant to Section 2.4) as compared to Accounts Payable on the
Closing Date Financial Statements, (vi) any decrease in Bonuses (as
calculated pursuant to Section 2.4) as compared to Bonuses on the
Closing Date Financial Statements, (vii) any decrease in Dividends as
compared to Dividends on the Closing Date Financial Statements and
(viii) any decrease in Shareholders Loans (as calculated pursuant to
Section 2.4) as compared to Shareholders Loans on the Closing Date
Financial Statements.
In addition, the Purchase Price shall be decreased dollar
for dollar by an amount equal to: (i) any decrease in the Cash on Hand
(as calculated pursuant to Section 2.4) as compared to Cash on Hand on
the Closing Date Financial Statements, (ii) any decrease in the
Closing Date Accounts Receivable (as calculated pursuant to Section
2.4) as compared to the Closing Date Accounts Receivable on the
Closing Date Financial Statements, (iii) any decrease in Prepaids (as
calculated
<PAGE>
pursuant to Section 2.4) as compared to the Prepaids on the Closing
Date Financial Statements, (iv) any decrease in MEI Interests as
compared to the MEI Interests on the Closing Date Financial
Statements, (v) any increase in Accounts Payable (as calculated
pursuant to Section 2.4) as compared to Accounts Payable on the
Closing Date Financial Statements, (vi) any increase in Bonuses (as
calculated pursuant to Section 2.4) as compared to Bonuses on the
Closing Date Financial Statements, (vii) any increase in Dividends as
compared to Dividends on the Closing Date Financial Statements and
(viii) any increase in Shareholders Loans (as calculated pursuant to
Section 2.4) as compared to Shareholders Loans on the Closing Date
Financial Statements.
The aggregate, net adjustment made pursuant to this Section
2.5(b) is hereinafter referred to as the "Adjustment Amount."
(c) As soon as is reasonably practicable following the
preparation and delivery of the Updated Schedules, the Purchaser shall
prepare and deliver to the Shareholders' Representative a statement
(the "Closing Statement") which shall set forth the adjustments to the
Purchase Price to be made, if any, in accordance with this Agreement.
Concurrently with its delivery of the Closing Statement to the
Shareholders' Representative, the Purchaser shall cause reasonable
access to be granted to the Shareholders' Representative to the work
papers and schedules prepared or used by the Purchaser and its
accountants in connection with the preparation of the Closing
Statement.
(d) To the extent the Adjustment Amount results in an
increase of the Purchase Price, Purchaser shall promptly pay the
amount of such increase to the Shareholders' Representative. To the
extent the Adjustment Amount results in a decrease to the Purchase
Price, the Shareholders in each case, jointly and severally, shall
promptly pay the full amount of such decrease to Purchaser. The
Adjustment Amount shall include interest from the Closing Date to the
date(s) of payment calculated at a rate of 10% per annum compounded
monthly. The Adjustment Amount together with such interest shall be
due and payable within 10 days after calculation of the Adjustment
Amount, subject to the terms of Section 2.5(e) below; provided that in
any event interest shall accrue at such rate through the date(s) of
payment. Any amounts paid pursuant to this Section 2.5 (other than
interest) shall be an adjustment to the Purchase Price.
<PAGE>
(e) In the event that the Shareholders' Representative
gives the Purchaser written notice within 10 days after delivery to
the Shareholders' Representative of the Closing Statement that the
Shareholders' Representative disputes any portion of the Closing
Statement (a "Dispute Notice") and such dispute is not resolved within
20 days after delivery of such Dispute Notice to the Purchaser, either
Shareholders' Representative or the Purchaser may submit such dispute
to KPMG - Victoria, Chartered Accountants for arbitration for final
resolution in accordance with the commercial arbitration rules of the
American Arbitration Association then in effect. The determination of
such arbitrators shall be final and binding upon the parties hereto,
and the fees of such arbitrators in connection with the determination
shall be paid by the party against whom the award was made, or if a
compromise was made, shared equally. Any portion of the Closing
Statement not subject to a Dispute Notice shall become binding and
final upon the parties on the 11th day after delivery of the Closing
Statement to the Shareholders' Representative.
ARTICLE III
CLOSING AND TERMINATION
3.1 Closing Date. Subject to the satisfaction of the
------------
conditions set forth in Sections 7.1 and 7.2 hereof (or the waiver
thereof by the party entitled to waive that condition), the closing of
the sale and purchase of the Shares provided for in Section 1.1 hereof
(the "Closing") shall take place at 10:00 A.M. at the offices of Weil,
Gotshal & Manges LLP located at 767 Fifth Avenue, New York, New York,
10153 (or at such other place as the parties may designate in writing)
on November 15, 1996, or on such other date and at such other place as
the Shareholders' Representative and the Purchaser may jointly
designate in writing. The date on which the Closing shall be held is
referred to in this Agreement as the "Closing Date."
3.2 Termination of Agreement. This Agreement may be
------------------------
terminated prior to the Closing as follows:
(a) At the election of either the Shareholders'
Representative or the Purchaser on or after November 15, 1996, if the
Closing shall not have occurred by the close of business on such date,
provided that the terminating party is not in breach of this Agreement
or otherwise in default of any of its obligations hereunder;
<PAGE>
(b) by mutual written consent of the Shareholders'
Representative and the Purchaser; or
(c) by the Shareholders' Representative or the Purchaser
if there shall be in effect a final nonappealable Order of a
Governmental Body of competent jurisdiction restraining, enjoining or
otherwise prohibiting the consummation of the transactions
contemplated hereby.
3.3 Procedure Upon Termination. In the event of
--------------------------
termination of this Agreement pursuant to Section 3.2 hereof, written
notice thereof shall forthwith be given by the terminating party to
the other party or parties, and this Agreement shall, subject to
Section 3.4, terminate, and the purchase of the Shares hereunder shall
be abandoned, without further action by the Purchaser or the
Shareholders. If this Agreement is terminated as provided herein,
each party shall redeliver all documents, work papers and other
material of any other party relating to the transactions contemplated
hereby, whether so obtained before or after the execution hereof, to
the party furnishing the same.
3.4 Effect of Termination. In the event that this
---------------------
Agreement is validly terminated as provided herein, then the parties
shall be relieved of their duties and obligations arising under this
Agreement after the date of such termination and such termination
shall be without liability to the Purchaser, National or any
Shareholder; provided, however, that the obligations of the parties
-------- -------
set forth in Section 10.3 hereof shall survive any such termination
and shall be enforceable hereunder; and provided, further, however,
-------- ------- -------
that nothing in this Section 3.4 shall relieve any party hereto of any
liability for a breach of this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
Each of the Shareholders hereby jointly and severally
represents and warrants to Purchaser as follows:
4.1 Organization and Good Standing. Each of National and
------------------------------
each Shareholder (other than Shareholders that are natural persons) is
a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization as set forth
above and has all requisite corporate power and authority to own,
lease and operate its properties and
<PAGE>
to carry on its business as now conducted. Schedule 4.1 sets forth,
for each Shareholder that is not a natural person, the date of its
formation, and the jurisdiction under whose laws such Shareholder was
organized. Each of National and Alberta is duly qualified or
authorized to do business and is in good standing under the laws of
each jurisdiction in which it owns or leases real or immovable
property and each other jurisdiction in which the conduct of its
business or the ownership of its properties requires such
qualification or authorization.
4.2 Authorization of Agreement. Each Shareholder and
--------------------------
National has all requisite power, authority and legal capacity to
execute and deliver this Agreement, a Non-Competition Agreement
substantially in the form of Exhibit A hereto (collectively, the "Non-
Competition Agreements") and each other agreement, document,
instrument or certificate contemplated by this Agreement to be
executed by such Person in connection with the consummation of the
transactions contemplated by this Agreement (together with this
Agreement and the Non-Competition Agreements, the
"Shareholder/National Documents"), and to consummate the transactions
contemplated hereby and thereby. This Agreement has been, and each of
the Shareholder/National Documents will be at or prior to the Closing,
duly and validly executed and delivered by each Shareholder and
National and (assuming the due authorization, execution and delivery
by Purchaser if a party thereto) this Agreement constitutes, and each
of the Shareholder/National Documents when so executed and delivered
will constitute, the legal, valid and binding obligations of each
Shareholder and National, enforceable against such Person in
accordance with their respective terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles
of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
4.3 Capitalization.
--------------
(a) The authorized capital stock of National consists
solely of an unlimited number of Class A common shares, without par
value (the "Common Stock"). There are 10,000 shares of Common Stock
issued and outstanding. The National Shares constitute all of the
issued and outstanding shares of Common Stock and were duly authorized
for issuance and are validly issued, fully paid and non-assessable and
free of preemptive rights.
<PAGE>
(b) There is no existing option, warrant, call, right,
commitment or other agreement of any character to which any
Shareholder, any Tri-S Shareholder or National or any of its
Subsidiaries is a party requiring (or which may in the future
require), and there are no securities of National or any of its
Subsidiaries outstanding which upon conversion or exchange would (or
may in the future) require, the issuance, sale or transfer of any
shares of capital stock or other securities of National or other
securities convertible into, exchangeable for or evidencing the right
to subscribe for or purchase shares of capital stock or other
securities of National. None of the Shareholders, the Tri-S
Shareholders or National is a party to any voting trust or other
voting agreement with respect to any of the shares of Common Stock or
to any agreement relating to the issuance, sale, redemption, transfer
or other disposition of the capital stock of National.
4.4 Subsidiaries and Other Interests. Schedule 4.4(a)
--------------------------------
hereto sets forth the name of each Subsidiary and, with respect to
each such Subsidiary, the jurisdiction in which it is incorporated or
organized, the jurisdictions, if any, in which it is qualified to do
business, the number of shares of its authorized capital stock, the
number and class of shares thereof duly issued and outstanding, the
names of all of its stockholders or other equity owners and the number
of shares of stock owned by each stockholder or the amount of equity
owned by each equity owner. Each Subsidiary is a duly organized and
validly existing corporation in good standing under the laws of the
jurisdiction of its incorporation and is duly qualified to do business
and is in good standing under the laws of (i) each jurisdiction in
which it owns or leases real or immovable property and (ii) each other
jurisdiction in which the conduct of its business or the ownership of
its assets requires such qualification. Each Subsidiary has all
requisite corporate power and authority to own its properties and
carry on its business as presently conducted. Other than (i) the
equity interests in Subsidiaries set forth on Schedule 4.4(a), and
(ii) the minority interests set forth on Schedule 4.4(b) (the
"Minority Equity Interests"), none of National or any of its
Subsidiaries owns any equity interests in any Person. The outstanding
shares of capital stock of each Subsidiary are validly issued, fully
paid and non-assessable, and all such shares are owned by the holder
thereof, free and clear of any and all Liens. No shares of capital
stock are held by any Subsidiary as treasury stock. There is no
existing option, warrant, call, right, commitment or other agreement
of any character to which any Subsidiary is a party requiring (or
which may in the future require), and there are no securities of
National or any Subsidiary outstanding which upon conversion or
<PAGE>
exchange would (or may in the future) require, the issuance, sale or
transfer of any shares of capital stock or other securities of
National or any Subsidiary or other securities convertible into,
exchangeable for or evidencing the right to subscribe for or purchase
shares of capital stock of National or any Subsidiary. None of the
Shareholders, the Tri-S Shareholders or National is a party to any
voting trust or other voting agreement with respect to any of the
shares of Common Stock or to any agreement relating to the issuance,
sale, redemption, transfer or other disposition of the capital stock
of any Subsidiary. Neither National nor any of its Subsidiaries has
any present or future obligation (contingent or otherwise) to make any
capital contribution to, or purchase any equity of, any Subsidiary or
any other Person.
4.5 Corporate Records.
-----------------
(a) National and the Shareholders have delivered to the
Purchaser true, correct and complete copies of the certificate of
incorporation or amalgamation (certified by the Registrar of
Corporations or other appropriate official of the applicable
jurisdiction of organization) and articles (certified by the
secretary, assistant secretary or other appropriate officer) or
comparable organizational documents of National and each of its
Subsidiaries.
(b) The minute books of National and each Subsidiary have
been previously made available to the Purchaser and contain complete
and accurate records of all meetings and accurately reflect all other
corporate action of the stockholders and boards of directors
(including committees thereof) of National and such Subsidiaries. The
stock certificate books and stock transfer ledgers of National and the
Subsidiaries have been previously made available to the Purchaser and
are true, correct and complete.
4.6 Conflicts; Consents of Third Parties. Except as set
------------------------------------
forth on Schedule 4.6, (a) none of the execution and delivery by any
Shareholder or National of this Agreement and the Shareholder/National
Documents, the consummation by each of Shareholder and National the
transactions contemplated hereby and thereby, or compliance by any
Shareholder or National with any of the provisions hereof or thereof
will (i) conflict with, or result in the breach of, any provision of
the articles or certificate of incorporation, by-laws, shareholder
agreement or other organizational documents of any Shareholder,
National or any Subsidiary; (ii) conflict with, violate, result in the
breach or termination of, constitute a default under, or give rise to
any right of acceleration under, any note, bond, mortgage, deed
<PAGE>
of trust, indenture, license, lease, agreement or other instrument or
obligation to which any Shareholder, National or any Subsidiary is a
party or by which any of them or any of their respective properties or
assets is bound; (iii) violate any statute, rule, regulation, judgment
or Order of any Governmental Body by which any Shareholder, National
or any Subsidiary is bound; or (iv) result in the creation of any Lien
upon the Shares or the properties or assets of National or any
Subsidiary.
(b) No consent, waiver, approval, Order, Permit or
authorization of, or declaration or filing with, or notification to,
any Person or Governmental Body is required on the part of any
Shareholder or National in connection with the execution and delivery
of this Agreement or the Shareholder/National Documents, or the
compliance by each Shareholder or National, as the case may be, with
any of the provisions hereof or thereof.
4.7 Ownership and Transfer of Shares. Each Shareholder is
--------------------------------
the record and beneficial owner of the Shares indicated as being owned
by such Shareholder on Schedule 4.7, free and clear of any and all
Liens. Each Shareholder has the power and authority to sell,
transfer, assign and deliver such Shares as provided in this
Agreement, and such delivery will convey to the Purchaser good and
marketable title to such Shares, free and clear of any and all Liens.
Immediately after the Closing, Purchaser will own, directly or (in the
case of the Other Shares) indirectly through Tri-S, all the equity
interests in National and Tri-S.
4.8 Financial Statements. National and the Shareholders
--------------------
have delivered to the Purchaser copies of (i) the audited consolidated
balance sheets of National and its Subsidiaries as at December 31,
1993, 1994 and 1995 and the related audited consolidated statements of
income and of cash flows of National and its Subsidiaries for the
years then ended and (ii) the unaudited consolidated balance sheet of
National and its Subsidiaries as at September 30, 1996 and the related
consolidated statements of income and cash flows of National and its
Subsidiaries for the period then ended (such audited and unaudited
statements, including the related notes and schedules thereto, are
referred to herein as the "Financial Statements"). Each of the
Financial Statements is complete and correct in all material respects,
has been prepared in accordance with GAAP (subject to normal year-end
adjustments in the case of the unaudited statements) and in conformity
with the practices consistently applied by National without
modification of the accounting principles used in the preparation
thereof, and presents fairly in accordance with GAAP the consolidated
<PAGE>
financial position, results of operations and cash flows of National
and its Subsidiaries as at the dates and for the periods indicated.
For the purposes of this Article IV, the audited
consolidated balance sheet of National and its Subsidiaries as at
December 31, 1995 is collectively referred to as National's "Balance
Sheet" and December 31, 1995 is referred to as the "Balance Sheet
Date".
4.9 No Undisclosed Liabilities. Except as set forth on
--------------------------
Schedule 4.9, neither National nor any of its Subsidiaries has any
indebtedness, obligations or liabilities of any kind (whether
absolute, contingent or otherwise, and whether due or to become due)
which are not reflected on its respective Balance Sheet other than
such indebtedness, obligations or liabilities (i) as were incurred in
the ordinary and usual course of business consistent with its past
practices since the Balance Sheet Date, (ii) existing pursuant to any
contract or agreement disclosed on Schedules 4.12(a)(1), 4.13 or 4.15
(or any contract or agreement not required to be disclosed thereon
because such contract or agreement was not of the type required to be
disclosed thereon by such Sections) or (iii) which will be repaid or
discharged prior to the Closing.
4.10 Absence of Certain Developments. Except as expressly
-------------------------------
required by this Agreement or as set forth on Schedule 4.10, since the
Balance Sheet Date:
(a) there has not been any Material Adverse Change in
National or any Subsidiary nor has there occurred any event which is
reasonably likely to result in a Material Adverse Change in National
or any of the Subsidiaries;
(b) there has not been any damage, destruction or loss,
whether or not covered by insurance, with respect to the property and
assets of National or any Subsidiary having a replacement cost of more
than C$10,000 for any single loss or C$25,000 for all such losses;
(c) except as required by Section 1.3 with respect to the
Excluded Assets, there has not been any declaration, setting aside or
payment of any dividend or other distribution in respect of any shares
of capital stock of National or any repurchase, redemption or other
acquisition by National or any Subsidiary of any outstanding shares of
capital stock or other securities of, or other ownership interest in,
National or any Subsidiary;
<PAGE>
(d) neither National nor any Subsidiary has (i) awarded or
paid any bonuses to employees of National or any Subsidiary with
respect to the fiscal year ended December 31, 1995, or (ii) entered
into, or increased or agreed to increase the compensation payable or
to become payable by it or the coverage or benefits available under,
any written or oral employment agreement or arrangement, deferred
compensation agreement, severance pay, termination pay, vacation pay,
company awards, salary continuation for disability, sick leave,
deferred compensation, bonus or other incentive compensation,
insurance, pension or other employee benefit plan, payment or
arrangement made to, for or with National's or any Subsidiary's
directors, officers, employees, agents or representatives (other than
normal increases in the ordinary course of business consistent with
past practice and that in the aggregate have not resulted in a
material increase in the benefits or compensation expense of National
and the Subsidiaries taken as a whole);
(e) there has not been any change by National or any
Subsidiary in accounting or Tax reporting principles, methods or
policies;
(f) neither National nor any Subsidiary has entered into
any transaction or Contract or conducted its business other than in
the ordinary course consistent with past practice;
(g) neither National nor any Subsidiary has failed to
promptly pay and discharge current liabilities except where disputed
in good faith by appropriate proceedings;
(h) neither National nor any Subsidiary has made any loans,
advances or capital contributions to, or investments in, any Person or
paid any fees or expenses to any Shareholder or Tri-S Shareholder or
any Affiliate of any Shareholder or Tri-S Shareholder;
(i) neither National nor any Subsidiary has mortgaged,
pledged or subjected to any Lien any of its assets, or acquired any
assets or sold, assigned, transferred, conveyed, leased or otherwise
disposed of any assets, except for assets acquired or sold, assigned,
transferred, conveyed, leased or otherwise disposed of in the ordinary
course of business consistent with past practice;
(j) neither National nor any Subsidiary has discharged or
satisfied any Lien, or paid any obligation or liability (fixed or
contingent), except in the ordinary course of business consistent with
past practice and which, in the aggregate, would
<PAGE>
not be material to National and its Subsidiaries taken as a whole;
(k) neither National nor any Subsidiary has canceled or
compromised any debt or claim or amended, canceled, terminated,
relinquished, waived or released any Contract or right except in the
ordinary course of business consistent with past practice and which,
in the aggregate, would not be material to National and its
Subsidiaries taken as a whole;
(l) neither National nor any Subsidiary has engaged in any
business in which it had not been engaged prior to the Balance Sheet
Date, other than Pay Day Loans;
(m) neither National nor any Subsidiary has made or
committed to make any capital expenditures or capital additions or
betterments in excess of C$25,000 individually or C$200,000 in the
aggregate;
(n) neither National nor any Subsidiary has entered into
any transaction, arrangement or agreement with a Shareholder, a Tri-S
Shareholder or any of its or any Shareholder's or Tri-S Shareholder's
Affiliates;
(o) neither National nor any Subsidiary has instituted or
settled any material Legal Proceeding; and
(p) none of the Shareholders, National or Tri-S Shareholder
has agreed to do anything set forth in this Section 4.10.
4.11 Taxes.
-----
(a) All Tax Returns required to be filed by or with
respect to National and each Subsidiary or their respective assets
have been properly prepared and duly and timely filed with the
appropriate taxing authorities in all jurisdictions in which such Tax
Returns are required to be filed, and all such Tax Returns are true,
complete and correct in all material respects. National and each
Subsidiary has duly and timely paid or has had duly and timely paid on
its behalf all Taxes that are due, or claimed or asserted by any
taxing authority to be due, from or with respect to it for periods
covered by such Tax Returns. With respect to any period for which Tax
Returns have not yet been filed, or for which Taxes are not due or
owing, National and each Subsidiary has made or has caused to be made
sufficient current accruals for such Taxes in its financial statements
and Taxes for such period have or shall arise solely in the usual and
ordinary
<PAGE>
course of business. National and each Subsidiary has made or has
caused to be made all required estimated Tax payments sufficient to
avoid any underpayment penalties.
(b) National and each Subsidiary has or has caused to be
duly and timely withheld from employee salaries, wages and other
compensation and has paid over to the appropriate taxing authorities
all amounts required to be so withheld and paid over for all periods
under all applicable laws.
(c) No waivers of statutes of limitation or other
agreements or arrangements providing for an extension of time have
been given or requested with respect to National or any Subsidiary in
connection with any Tax Returns covering National or such Subsidiary
with respect to any Taxes payable by it and no power of attorney with
respect to any Tax matter is currently in force. The last period for
which Taxes were assessed with respect to the Federal Income Tax
Returns of National and any Subsidiary of National was December 31,
1995. The statutory period for the assessment of Taxes with respect
to the federal income Tax Returns of National and any Subsidiary of
National for all prior periods has expired. The last period for which
Taxes were assessed with respect to the provincial, local, and foreign
Tax Returns of National and any Subsidiary of National was December
31, 1995 (except for the Province of British Columbia, which was
December 31, 1994). The statutory period for the assessment of Taxes
with respect to the provincial, local, and foreign Tax Returns of
National and any Subsidiary of National for all periods through the
respective years specified in Schedule 4.11 has expired. No issue has
been raised by any taxing authority in any audit or examination of
National or any Subsidiary of National, which, by application of the
same or similar principles, could reasonably be expected to result in
a deficiency for any subsequent period (including periods subsequent
to the Closing Date). There are no outstanding agreements, waivers,
or arrangements extending the statutory period of limitation
applicable to any claim for, or the period for the collection or
assessment of, Taxes due from or with respect to National and each
Subsidiary for any taxable period.
(d) The Shareholders have delivered or made available to
the Purchaser true and complete copies of each of (i) any audit
reports issued by any taxing authority within the last three years
relating to the federal, provincial, local or foreign Taxes due from
or with respect to National, any Subsidiary of National and (ii) all
of the federal, provincial local and foreign Tax Returns, for each of
the last three years filed by National and any Subsidiary of National.
<PAGE>
(e) All deficiencies asserted or assessments made as a
result of any examinations by the Revenue Canada or any other taxing
authority of the Tax Returns of or covering or including National or
any Subsidiary of National have been fully paid, and there are no
other audits or investigations by any taxing authority in progress,
nor has National or any Subsidiary of National received any notice
from any taxing authority that it intends to conduct such an audit or
investigation.
(f) Schedule 4.11 lists all material types of Taxes paid
and material types of Tax Returns filed by or on behalf of National or
any Subsidiary of National in respect of the last two completed fiscal
years. No claim has been made by a taxing authority in a jurisdiction
where National or any Subsidiary of National do not file Tax Returns
such that it is or may be subject to taxation by that jurisdiction.
(g) There are no liens with respect to Taxes upon any of
the assets of National or any Subsidiary of National.
(h) There are no actions, suits, proceedings,
investigations or claims now threatened or pending against any of
National or the Subsidiaries in respect of Taxes nor are there any
matters under discussion with any governmental authority with respect
to Taxes asserted by any such authority;
(i) The inventories of National and the Subsidiaries have
been valued for tax purposes at the lower of cost or net realizable
value;
(j) With the exception of computers of National and the
Subsidiaries, the fair market value of all depreciable assets of
National and the Subsidiaries is at least the amount of the
undepreciated capital cost therefor as recorded on their respective
books.
(k) The paid-up capital of National and the Subsidiaries
for income tax purposes equals their respective paid up capital under
corporate law;
(l) Except as set forth on Schedule 4.11, none of National
nor the Subsidiaries has, within the last four completed fiscal years,
made any election under Section 85 of the Tax Act with respect to the
acquisition or disposition of any property;
(m) None of National nor the Subsidiaries has, within the
last four completed fiscal years, made any election under
<PAGE>
Sub-section 83(2) of the Tax Act with respect to payment out of a
capital dividend account;
(n) None of National nor the Subsidiaries has, within the
last four completed fiscal years, acquired or had the use of any
property from a person with whom it was not dealing at arm's length;
(o) Except for Excluded Assets none of National nor the
Subsidiaries has disposed of anything to a person with whom it was not
dealing at arm's length for proceeds less than the fair market value
thereof;
(p) None of National or the Subsidiaries has, since the
Balance Sheet Date, discontinued carrying on any business in respect
of which any non-capital losses were incurred;
(q) National and the Subsidiaries have made all elections
required to be made under the Tax Act in connection with any
distributions and all such elections were true and correct and in
prescribed form and were made within the prescribed time periods;
(r) Since their respective dates of incorporation, each of
National and the Subsidiaries has been a "Canadian-controlled private
corporation" within the meaning of the Tax Act;
(s) None of National nor the Subsidiaries is, nor has
previously been at any time, associated with any other Canadian-
controlled private corporations (within the meaning of the Tax Act),
and none of National nor the Subsidiaries has filed with the Minister
of National Revenue any agreement or form under Section 125(3) of the
Tax Act and, except as disclosed on Schedule 4.4(a) or Schedule
4.4(b), none of National nor any of the Subsidiaries is carrying on
and has ever carried on business as a member of any partnership;
(t) None of National nor any of the Subsidiaries nor their
respective directors, officers or employees are aware without inquiry
of any contingent Tax liabilities or any grounds which would prompt a
re-assessment, including aggressive treatment of income and expenses
in filing earlier Tax returns;
(u) Except for the transfer of a 25% equity interest from
Mark McDonald to Mrs. Clark during January 1995, control of National
and the Subsidiaries has not been acquired by a person or persons
since its date of incorporation (for purposes of this
<PAGE>
section, "control" is to be given the meaning found in Sections 186,
251 and 256 of the Tax Act);
(v) To the Shareholders' knowledge there are no amounts
outstanding and unpaid for which any of National or the Subsidiaries
has previously claimed a deduction under the Tax Act;
(w) To the Shareholders' knowledge, there are no
circumstances existing which could result in the application to any of
National or the Subsidiaries of either Section 78 or Section 80,
80.01, 80.02, 80.3 or 80.04 of the Tax Act;
(x) Except for a C$532,000 bonus received from Western
Union that may be eligible for a reserve, none of National or the
Subsidiaries has claimed and will not claim any reserve under any one
or more of subparagraph 40(1)(a)(iii) or subparagraphs 20(1)(m) or
20(1)(n) of the Tax Act if any such amount could be included in their
income for a period ending after Closing;
(y) The financial statements and schedules attached to the
corporate income tax returns as filed by each of National and the
Subsidiaries for each of their respective taxation years reflect and
disclose all transactions to which each of them was or is a party as
required by the Tax Act and the regulations made thereunder or other
applicable revenue laws and all of the transactions to which each of
National and the Subsidiaries was or is a party are reflected or
disclosed in these financial statements and schedules and these
statements and schedules have been duly and accurately completed as
required by these acts and regulations;
(z) None of National nor the Subsidiaries has received a
dividend out of tax paid undistributed surplus or 1971 capital surplus
on hand dividends within the meaning of the Tax Act with respect to
any assets it currently holds;
(aa) None of National nor the Subsidiaries has any net
capital loss as of the Balance Sheet Date and no transactions since
that date will result in any net capital loss;
(ab) Each of National and the Subsidiaries is duly
registered under subdivision (d) of Division V of Part IX of the
Excise Tax Act with respect to the GST, and their respective
registration numbers are as set forth on Schedule 4.11.
<PAGE>
(ac) Each of National and the Subsidiaries has paid all
Taxes imposed by the Retail Sales Tax (Ontario) and the applicable
legislation of each other province of Canada on the acquisition of its
tangible personal property and none of its tangible personal property
or moveable property has been transferred in a transaction
contemplated under the provisions of Section 20.7 of the Retail Sales
Tax Act (Quebec) and any regulations made thereunder or Section 18 of
Regulation 904 to the Retail Sales Tax Act (Ontario), or any
predecessor thereof or the analogous provisions of the sales tax
legislation of any other province;
(ad) None of National nor the Subsidiaries has made or been
a party to any election under Sections 150(1), 156(1), 227(1) or
273(1) of the Excise Tax Act.
(ae) The preceding representations and warranties in this
Section 4.11 which refer to the Tax Act are true and correct with
respect to the same or equivalent provisions, if any, of the Quebec
Taxation Act or any other provincial taxation legislation.
4.12 Real Property.
-------------
(a) Schedule 4.12(a)(1) sets forth a complete list of all
real or immovable property and interests in real or immovable property
leased by National or any of the Subsidiaries (individually, a "Real
Property Lease" and the real or immovable properties specified in such
leases, being referred to herein individually as a "Company Property"
and collectively as the "Company Properties") as lessee or lessor. The
Company Property constitutes all interests in real or immovable
property currently used or currently held for use in connection with
the ownership and/or operation of the Stores or which are necessary
for the continued operation of the Stores as currently conducted. To
the best of Shareholders' knowledge the premises leased pursuant to
the Real Property Leases comply with all building, fire, zoning and
other ordinances and regulations applicable thereto. National and the
Subsidiaries have paid all rent, additional rent and/or other charges
reserved and payable under each of the Real Property Leases to the
extent so payable as of October 1, 1996. National and the
Subsidiaries have a valid and enforceable leasehold interest under
each of the Real Property Leases, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity); neither
National nor any Subsidiary has caused an event of default or received
any written
<PAGE>
notice of any default or event that with notice or lapse of time, or
both, would constitute a default by National or any Subsidiary under
any of the Real Property Leases; and none of the landlords in respect
of the Real Property Leases has caused an event of default that with
notice or lapse of time, or both, would constitute a default by any
one of such landlords under any of the Real Property Leases. Each of
the Company Properties, buildings, fixtures and improvements thereon
is in good operating condition and repair (subject to normal wear and
tear). With respect to each Company Property, there is no management
agreement, equipment lease, service contract or other contract or
agreement to which National or any of the Subsidiaries is a party
affecting such Company Property (collectively, "Property Contracts")
which (i) was not made in the ordinary course of business, (ii) is not
terminable upon 30 days' prior notice by National or any of the
Subsidiaries without payment of a premium or penalty or (iii) requires
payments in excess of an amount that, if added to the monthly payment
obligations of all other Property Contracts in respect of such Company
Property, would cause the aggregate amount of all monthly payment
obligations in respect of all Property Contracts for such Company
Property to exceed C$1,000. National and the Shareholders have
delivered to the Purchaser true, correct and complete copies of the
Real Property Leases, together with all amendments, modifications or
supplements, if any, thereto. National presently owns and operates
check cashing stores at the locations set forth next to each Company
Property on Schedule 4.12(a)(1).
(b) National and the Subsidiaries have all certificates of
occupancy and Permits of any Governmental Body necessary or useful for
the current use and operation of each Company Property, and National
and the Subsidiaries have fully complied with all material conditions
of the Permits applicable to them. No material default or violation,
or event that with the lapse of time or giving of notice or both would
become a default or violation, has occurred in the due observance of
any Permit.
(c) There does not exist any actual or, to the best
knowledge of National and the Shareholders, threatened or contemplated
condemnation or eminent domain proceedings that affect any Company
Property or any part thereof, and none of National or any of the
Shareholders has received any notice, oral or written, of the
intention of any Governmental Body or other Person to take or use all
or any part thereof.
(d) None of the Shareholders or National has received any
written notice from any insurance company that has issued a
<PAGE>
policy with respect to any Company Property requiring performance of
any structural or other repairs or alterations to such Company
Property.
(e) Neither National nor any Subsidiary owns or holds, or
is obligated under or a party to, any option, right of first refusal
or other Contract right to purchase, acquire, sell, assign or dispose
of any real estate or any portion thereof or interest therein.
(f) Neither National nor any Subsidiary owns or holds any
real or immovable property in fee.
4.13 Tangible Personal Property.
--------------------------
(a) Schedule 4.13 sets forth all leases of personal or
moveable property ("Personal Property Leases") relating to personal
property used or useable in the operation of the Stores or the
Business. National and the Shareholders have delivered or otherwise
made available to the Purchaser true, correct and complete copies of
the Personal Property Leases, together with all amendments,
modifications or supplements thereto.
(b) National and each of its Subsidiaries has a valid
leasehold interest under each of the Personal Property Leases under
which it is a lessee, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is
sought in a proceeding at law or in equity), and there is no default
under any Personal Property Lease by National or any Subsidiaries or,
to the best knowledge of National or any of the Shareholders, by any
other party thereto, and no event has occurred that with the lapse of
time or the giving of notice or both would constitute a default
thereunder. Each of the items of tangible personal property having a
value greater than C$1,000 used by National or any of its Subsidiaries
under the Personal Property Leases is in good condition and repair
(ordinary wear and tear excepted) and is suitable for the purposes
used.
(c) National and each of its Subsidiaries has good and
marketable title to all of the items of tangible personal or moveable
property reflected in its respective Balance Sheet (except as sold or
disposed of subsequent to the date thereof in the ordinary course of
business consistent with past practice), free and clear of any and all
Liens other than the Permitted Exceptions. All such items of tangible
personal or moveable
<PAGE>
property which, individually or in the aggregate, are material to the
operation of the Stores and the Business are in good condition and in
a state of good maintenance and repair (ordinary wear and tear
excepted) and are suitable for the purposes used.
(d) Each of National and the Subsidiaries owns (or leases
from unaffiliated Persons) all tangible property necessary to conduct
its respective business as conducted on the date hereof.
4.14 Intangible Property. Schedule 4.14 contains a
-------------------
complete and correct list of each patent, patent license, trademark,
trade name, trade secret, trade secret right, computer program,
software, service mark, brandmark, brandname and copyright owned or
used by National and/or any of its Subsidiaries as well as all
registrations thereof and pending applications therefor, and each
license or other agreement relating thereto. Each of the foregoing is
owned by the party shown on such Schedule as owning the same, free and
clear of all Liens and is in good standing and not the subject of any
challenge. There have been no claims made and none of the
Shareholders, National or any Subsidiary has received any notice or
otherwise knows or has reason to believe that any of the foregoing is
invalid or conflicts with the asserted rights of others. National and
each Subsidiary possesses all patents, patent licenses, trade names,
trademarks, trade secret rights, computer programs, software, service
marks, brand marks, brand names, copyrights, know-how, formulae and
other proprietary and trade rights necessary for the conduct of its
business as now conducted, not subject to any restrictions and without
any known conflict with the rights of others and neither National nor
any Subsidiary has forfeited or otherwise relinquished any such
patent, patent license, trade name, trademark, trade secret right,
computer program, software, service mark, brand mark, brand name,
copyright, know-how, formulae or other proprietary right necessary for
the conduct of its business as conducted on the date hereof. Neither
National nor any Subsidiary is under any obligation to pay any
royalties or similar payments in connection with any license to any
Shareholder, any Affiliate thereof or any other person.
4.15 Material Contracts. Schedule 4.15 sets forth all of
------------------
the following Contracts to which either National or any of its
Subsidiaries is a party or by which it is bound (collectively, the
"Material Contracts"): (i) Contracts with any Shareholder or Tri-S
Shareholder or any direct or indirect shareholder, partner or equity
holder of National (or any Affiliates of any of the foregoing) or any
current or former officer or director of
<PAGE>
National or any of its Subsidiaries; (ii) Contracts with any labor
union or association representing any employee of National or any of
its Subsidiaries; (iii) Contracts pursuant to which any Person is
required to purchase or sell a stated portion of its requirements or
output from or to another Person; (iv) Contracts for the sale of any
of the assets of National or any of its Subsidiaries other than in the
ordinary course of business or for the grant to any Person of any
preferential rights to purchase any of its assets; (v) partnership,
shareholder or joint venture agreements; (vi) Contracts containing
covenants of National or any of its Subsidiaries or Affiliates not to
compete in any line of business or with any Person in any geographical
area or covenants of any other Person not to compete with National or
any of its Subsidiaries in any line of business or in any geographical
area; (vii) Contracts relating to the acquisition by National or any
of its Subsidiaries of any operating business or the capital stock of
any other Person; (viii) Contracts relating to the borrowing of money;
(ix) Contracts relating to the distribution of money orders or similar
instruments; (x) Contracts relating to money transfers; (xi) Contracts
relating to the payment of utility or other bills for third parties;
(xii) any other Contracts, other than Real Property Leases, which were
not entered into in the ordinary course consistent with past practice,
or which involve the expenditure of more than C$25,000 in the
aggregate or require performance by any party more than one year from
the date hereof; (xiii) Contracts involving an obligation to make a
Capital Expenditure; and (xiv) franchise or licensing Contracts
pursuant to which National or any Subsidiary is a franchisor or
licensor. There have been made available to the Purchaser true and
complete copies of each of the Material Contracts. Except as set
forth on Schedule 4.15, each of the Material Contracts and other
agreements is in full force and effect and is the legal, valid and
binding obligation of each party thereto, enforceable against such
party in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity). Except as
set forth on Schedule 4.15, neither National nor any Subsidiary is in
default in any material respect under any Material Contracts nor, to
the knowledge of any Shareholder or National, is any other party to
any Material Contract in default thereunder in any material respect.
For purposes hereof, "Assumed Contracts" shall consist of (i) the
Material Contracts listed on Schedule 4.15, (ii) the Non-Material
Contracts, and (iii) all Real Property Leases.
<PAGE>
4.16 Employee Benefits.
-----------------
(a) Schedule 4.16(a) contains an accurate and complete
list and description of, and sets forth the annual amount payable
pursuant to, all pension, profit sharing, retirement, death benefit,
welfare, severance pay, vacation pay, company awards, salary
continuation for disability, sick leave, deferred compensation, bonus
or other incentive compensation, stock purchase arrangements or
policies, life insurance, scholarship or other employee benefit plan,
program, policy or arrangement maintained by National or any of its
Subsidiaries or to which National or any of its Subsidiaries has any
liability (contingent or otherwise) with respect to employees,
officers, directors or shareholders of National ("Employee Benefit
Plans") therein described and the Financial Statements reflect in the
aggregate an accrual of all amounts accrued but unpaid under all such
Employee Benefit Plans as of the dates thereof. None of National nor
the Subsidiaries has any commitment, whether formal or informal, and
whether legally binding or not, to create any additional such Employee
Benefit Plan. Each of such Employee Benefit Plans disclosed on
Schedule 4.16(a) is in effect and National and the Subsidiaries is in
compliance with all laws, rules and regulations applicable thereto.
All Employee Benefit Plans disclosed on Schedule 4.16(a) have been
duly registered where required by, and are in good standing under, all
applicable legislation and National and the Subsidiaries have
fulfilled their respective funding obligations under all such plans
and no past service funding liabilities exist thereunder. With
respect to each current Employee Benefit Plan or plan under which
benefits may be due to, or liabilities may exist in respect of,
current or former employees, the Shareholders have delivered to the
Purchaser accurate and complete copies of (i) all currently applicable
plan texts and agreements; (ii) all summary plan descriptions and
material employee communications; (iii) the most recent annual report;
(iv) the most recent annual and periodic accounting of plan assets;
(v) the most recent actuarial valuation. Each Employee Benefit Plan
has been administered materially in accordance with its terms. All
material reports, returns and similar documents with respect to the
Employee Benefit Plans required to be filed with any Governmental Body
or distributed to any Employee Benefit Plan participant has been duly
and timely filed or distributed. There are no pending investigations
by any Governmental Body, termination proceedings or other claims
(except claims for benefits payable in the normal operation of the
Employee Benefit Plans), suits or proceedings against or involving any
Employee Benefit Plan or asserting any rights or claims to benefits
under any Employee Benefit Plan that could give rise to any material
liability.
<PAGE>
(b) All contributions and premiums required by law or by
the terms of any Employee Benefit Plan or any agreement relating
thereto have been timely made (without regard to any waivers granted
with respect thereto).
(c) There are no pending Legal Proceedings which have been
asserted or instituted against any of the Employee Benefit Plans, the
assets of any such plans or National, or the plan administrator or any
fiduciary of the Employee Benefit Plans with respect to the operation
of such plans (other than routine, uncontested benefit claims), and,
to the Shareholders' knowledge, there are no facts or circumstances
which could form the basis for any such Legal Proceeding.
(d) Except as disclosed on Schedule 4.16(d), neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any payment
becoming due to any employee of National or any of its Subsidiaries;
(ii) increase any benefits otherwise payable under any Employee
Benefit Plan; or (iii) result in the acceleration of the time of
payment or vesting of any such benefits.
4.17 Labor.
-----
(a) Except as set forth on Schedule 4.17(a), neither
National nor any of its Subsidiaries is party to any labor or
collective bargaining agreement and there are no labor or collective
bargaining agreements which pertain to employees of National or any of
its Subsidiaries. The Shareholders have delivered or otherwise made
available to the Purchaser true, correct and complete copies of the
labor or collective bargaining agreements listed on Schedule 4.17(a),
together with all amendments, modifications or supplements thereto.
(b) Except as set forth on Schedule 4.17(b), no employees
of National or any of its Subsidiaries are represented by any labor
organization. No labor organization or group of employees of National
or any of its Subsidiaries has made a pending demand for recognition,
and there are no representation proceedings or petitions seeking a
representation proceeding presently pending or, to the best knowledge
of National or any Shareholder, threatened to be brought or filed,
with any federal or provincial agency responsible for labor or
employment laws or other labor relations tribunal. There is no
organizing activity involving National or any of its Subsidiaries
pending or, to the best knowledge of National or any Shareholder,
threatened by any labor organization or group of employees of National
or any of its Subsidiaries.
<PAGE>
(c) There are no (i) strikes, work stoppages, slowdowns,
lockouts or arbitrations or (ii) material grievances or other labor
disputes pending or, to the best knowledge of National or any
Shareholder, threatened against or involving National or any of its
Subsidiaries. There are no unfair labor practice charges, grievances
or complaints pending or, to the best knowledge of National or any
Shareholder, threatened by or on behalf of any employee or group of
employees of National or any Subsidiary.
4.18 Employment Matters. The Subsidiaries have no
------------------
employees. Schedule 4.18 annexed hereto is a list of (a) the job
categories, number of employees in each category and salary or wage
range for each category with respect to employees of National who earn
total annual compensation of less than C$40,000, and (b) with respect
to all other employees, officers and directors of National, such
employee's name and a brief job description for each such employee
(collectively, the "Employees") and, for each such person, his or her
current rate of compensation (including salary, bonus and all other
forms of compensation), the date of hire and the date and amount of
the most recent increase in compensation, whether any commitment,
promise or undertaking has been made by National or any of its
officers with respect to any increase in the compensation payable to
any such employee or any portion thereof the extent of such employee's
participation in any Employee Benefit Plans and any accrued rights
under such Employee Benefit Plans that will lapse or terminate by
reason of the consummation of the transactions contemplated by this
Agreement. None of National nor the Subsidiaries has any employment,
consulting or severance contract, arrangement or understanding (either
written or oral) with any person whomsoever except such contracts as
are listed on Schedule 4.18. Each of National and the Subsidiaries
has made all deductions required by law to be made for wages and
salaries, which deductions are consistent with past practices and in
accordance with generally accepted accounting principles and has
either remitted same to the respective legally constituted authorities
entitled to receive payment of same or has provided for same in its
accounts. Hours worked by, and payments made to, employees of each of
National and the Subsidiaries have not been in violation of any
applicable laws, rules or regulations dealing with such matters and
all severance payments due to any employee have been paid or accrued
as a liability on the books of National and the Subsidiaries (as the
case may be). The consummation of the transactions contemplated by
this Agreement will not give rise to any liability of National and the
Subsidiaries for severance pay or termination benefits.
<PAGE>
4.19 Litigation. Except as set forth in Schedule 4.19,
----------
there is no suit, action, proceeding, investigation, claim or order
pending or, to the knowledge of National or any Shareholder, overtly
threatened against National or any of its Subsidiaries (or to the
knowledge of National or any Shareholder, pending or threatened,
against any of the officers, directors or key employees of National or
any of its Subsidiaries with respect to their business activities on
behalf of National or any Subsidiary), or to which any of the
Shareholders or National or any of its Subsidiaries is otherwise a
party, before any court, or before any governmental department,
commission, board, agency, or instrumentality; nor, to the knowledge
of National or any Shareholder, is there any reasonable basis for any
such action, proceeding, or investigation. Neither National nor any
Subsidiary is subject to any judgment, Order or decree of any court or
Governmental Body and neither National nor any Subsidiary is engaged
in any legal action to recover monies due it or for damages sustained
by it.
4.20 Compliance with Laws. National and each Subsidiary
--------------------
possesses all Licenses of and from all Governmental Bodies, and has
made all filings with all Governmental Bodies, necessary to own or
lease its respective properties and assets and to conduct the
business(es) in which it is engaged. Except as set forth on Schedule
4.20, no proceeding has been served or, to our knowledge threatened
or commenced which seeks to, or could reasonably be anticipated to,
cause the suspension, modification, revocation or withdrawal of any
License. National and each Subsidiary is currently, and at all times
has been, in material compliance with all Laws applicable to National
and such Subsidiaries and/or the businesses in which they have been
engaged at any time on or prior to the Balance Sheet Date, including,
without limitation, all applicable credit, banking and consumer
protection Laws, regulating check cashing, debt collection, plain
language Laws and Laws proscribing unfair and/or deceptive acts or
practices) and franchise disclosure Laws; neither National nor any
Subsidiary nor any of their directors, officers, employees or
representatives has offered, proposed, promised or made any illegal
payment to officers, employees or representatives of any Governmental
Body, or engaged in any illegal reciprocal practices or made any
illegal payment or given any other illegal consideration to any third
party.
4.21 Environmental Matters. Except as set forth on
---------------------
Schedule 4.21 hereto:
(a) the operations of National and each of its
Subsidiaries have been and are in compliance with all applicable
<PAGE>
Environmental Laws and all Licenses issued pursuant to Environmental
Laws ("Environmental Permits");
(b) National and each of its Subsidiaries has obtained all
Environmental Permits necessary to operate its business and is in
compliance with such Environmental Permits;
(c) neither National nor any of its Subsidiaries is the
subject of any outstanding written order, agreement or Contract with
any governmental authority or person respecting (i) Environmental
Laws, (ii) Remedial Action, (iii) any Release or threatened Release of
a Hazardous Material or (iv) any Environmental Claim;
(d) neither National nor any of its Subsidiaries has
received any written communication alleging that National or any of
its Subsidiaries or the operations thereof may be in violation of any
Environmental Law or any Environmental Permit, or may have any
liability under any Environmental Law;
(e) neither National nor any of its Subsidiaries has any
liability in connection with any Release of any Hazardous Materials
into the indoor or outdoor environment (whether on-site or off-site)
and no facts or circumstances exist which could reasonably be expected
to give rise to such liability under Environmental Laws;
(f) there are no legal or administrative proceedings
pending or, to the knowledge of any of the Shareholders or National,
threatened against National or any Subsidiary alleging the violation
of or seeking to impose liability pursuant to Environmental Laws;
(g) neither National nor any of its Subsidiaries has
received notice of any investigations of the business, operations, or
currently or previously owned, operated or leased property of National
or any of its Subsidiaries nor, to the knowledge of any of the
Shareholders or National, are there any such pending or threatened
investigations which could lead to the imposition of any liability
pursuant to Environmental Law;
(h) there is not located at any of the properties owned by
National or any of its Subsidiaries any (i) underground storage tanks,
(ii) asbestos-containing material or (iii) equipment containing
polychlorinated biphenyls;
(i) neither National nor any of its Subsidiaries has
transported, incorporated or otherwise deposited or installed any
<PAGE>
(i) underground storage tanks, (ii) asbestos-containing material or
(iii) equipment containing polychlorinated biphenyls at any of the
properties leased, used or operated by National or any of its
Subsidiaries;
(j) National and the Shareholders have provided to the
Purchaser copies of all environmentally related audits, studies,
reports, analyses, and results of investigations that have been
performed with respect to the currently or previously owned properties
of National or any of its Subsidiaries; and
(k) National and the Shareholders have not had prepared
any environmentally related audits, studies, reports, analyses, or
results of investigation that have been performed with respect to the
currently or previously leased, used or operated properties of
National or any of its Subsidiaries.
4.22 Insurance. Schedule 4.22 sets forth a complete and
---------
accurate list of all policies of insurance of any kind or nature
covering National or any of its Subsidiaries or any of their
respective employees, properties or assets, including, without
limitation, policies of life, disability, fire, theft, workers
compensation, employee fidelity and other casualty and liability
insurance. All such policies are in full force and effect and neither
National nor any of its Subsidiaries is in default of any provision
thereof.
4.23 Payables. All accounts payable of National or any of
--------
its Subsidiaries reflected in their respective Balance Sheet or
arising after the date thereof are the result of bona fide
transactions entered into in the ordinary course of business and have
been paid or are not yet due and payable.
4.24 Related Party Transactions. Except as set forth on
--------------------------
Schedule 4.24, none of the Shareholders or any Affiliate of National
or any Shareholder has borrowed any monies from or has outstanding any
indebtedness or other similar obligations to National or any of its
Subsidiaries. Except as set forth in Schedule 4.24, none of the
Shareholders, National, any Subsidiary of National, any Affiliate of
National or any shareholder, officer, director or employee of any of
them (i) owns any direct or indirect interest of any kind in, or
controls or is a director, officer, employee or partner of, or
consultant to, or lender to or borrower from or has the right to
participate in the profits of, any Person which is (A) a competitor,
supplier, customer, landlord, tenant, creditor or debtor of National
or any of its Subsidiaries, (B) engaged in a business related to the
business of National or any of its Subsidiaries, or (C) a
<PAGE>
participant in any transaction to which National or any of its
Subsidiaries is a party or (ii) is a party to any Contract or
transaction with National or any of its Subsidiaries. Since the
Balance Sheet Date, National has not entered into any transactions
with any Affiliate.
4.25 Banks. Schedule 4.25 contains a complete and correct
-----
list of the names and locations of all banks in which National or any
Subsidiary has accounts or safe deposit boxes and the names of all
persons authorized to draw thereon or to have access thereto. Except
as set forth on Schedule 4.25, no person holds a power of attorney to
act on behalf of National or any Subsidiary.
4.26 Financial Advisors. Except as set forth on Schedule
------------------
4.26, no Person has acted, directly or indirectly, as a broker, finder
or financial advisor for any of the Shareholders or National in
connection with the transactions contemplated by this Agreement and no
Person is entitled to any fee or commission or like payment in respect
thereof.
4.27 Franchise Operations. Schedule 4.27 sets forth a true
--------------------
and complete list of check cashing locations with which National has a
franchise arrangement, including the parties thereto, the terms
thereof and the fees payable thereunder.
4.28 Name. "National Money Mart", "Money Mart of Canada",
----
"Money Mart", and "Insta Cheques" are the only names used by National
in the operation of the Stores and the Business.
4.29 Investment Intention. (a) Each DFG Stock Purchaser
--------------------
is acquiring the DFG Common Stock to be acquired by it pursuant to
this Agreement for its own account, for investment purposes only and
not with a view to the resale or distribution (as such term is used in
Section 2(11) of the Securities Act of 1933, as amended (the
"Securities Act")) thereof, nor with any present intention of
distributing or selling the same; and, except as contemplated by this
Agreement and the exhibits hereto, such DFG Stock Purchaser has no
present or contemplated agreement, undertaking, arrangement,
obligation, indebtedness or commitment providing for the disposition
thereof. Each DFG Stock Purchaser understands that the shares of DFG
Common Stock to be received by it will not have been registered under
the Securities Act and cannot be sold unless subsequently registered
under the Securities Act or an exemption from such registration is
available. Each DFG Stock Purchaser hereby acknowledges that the
certificates delivered to him or it evidencing his or its shares of
DFG Common Stock shall be legended as indicated in the
<PAGE>
previous sentence and as provided in the Shareholders Agreement and
DFG is not under any obligation to register such shares on such
shareholder's behalf or to assist such DFG Stock Purchaser in
complying with an exemption from registration under the Securities Act
or any state securities law. Each DFG Stock Purchaser is an
"accredited investor" within the meaning of Rule 501(a) of
Regulation D promulgated under the Securities Act.
(b) Each DFG Stock Purchaser will be acquiring the shares
of DFG Common Stock to be acquired by it: (i) as principal (as defined
in the Securities Act (British Columbia) (the "Act")) for its own
account, and not for the benefit of any other person; (ii) for
investment only and not with a view to immediate resale or
distribution; and (iii) under the exemption from prospectus
requirements available under paragraph 55(2)(4) of the Act and such
DFG Stock Purchaser is not a corporation or syndicate, partnership or
other form of unincorporated entity or organization created solely to
permit the purchase of such shares of DFG Common Stock by a group of
individuals whose individual share of the aggregate acquisition cost
of the shares of DFG Common Stock being acquired pursuant to this
Agreement is less than C$97,000.
(c) The offering and sale of shares of DFG Common Stock to
each DFG Stock Purchaser were not made through any advertisement in
printed media of general and regular paid circulation, radio or
television or any other form of advertisement.
(d) Each DFG Stock Purchaser is aware that no prospectus
has been prepared or filed by DFG with any securities commission or
similar authority in connection with the issue and sale of the shares
of DFG Common Stock contemplated hereby, and that:
(i) such DFG Stock Purchaser may be restricted from
using most of the civil remedies available under applicable securities
legislation;
(ii) such DFG Stock Purchaser may not receive
information that would otherwise be required to be given and DFG is
relieved from certain obligations to which it would otherwise be
subject if a prospectus were provided under applicable securities
legislation in connection with the issue and sale of the shares of DFG
Common Stock being issued as contemplated hereby, and
<PAGE>
(iii) the issue and sale of the shares of DFG Common
Stock being issued as contemplated hereby to such DFG Stock Purchaser
is subject to such sale being exempt from the requirements of
applicable securities laws as to the filing of a prospectus or the
delivery of an offering memorandum.
4.30 Accounts Receivable. Schedule 4.30 contains the
-------------------
standard form of the note and other loan documentation used by
National and the Subsidiaries to evidence the Pay Day Loans. Each of
the accounts receivable is bona fide, and was made in the ordinary
course of business with arms' length parties. Those accounts
receivable that form part of the Excluded Assets have the book value
set forth on Schedule 4.30.
4.31 [Intentionally Omitted]
----------------------
4.32 No Bankruptcy. There has not been filed any petition
-------------
or application, or any proceeding commenced which has not been
discharged, by or against National, the Subsidiaries or any of the
Shareholders with respect to any assets of any of them under any law,
domestic or foreign, relating to bankruptcy, reorganization,
fraudulent transfer, compromise, arrangements, insolvency,
readjustment of debt or creditors' rights, and no assignment has been
made by any of them for the benefit of their respective creditors.
4.33 Minority Equity Interests.
-------------------------
(a) The interests in the Minority Equity Interests are as
set forth on Schedule 4.4(b), and are owned by National free and clear
of any and all Liens.
(b) Other than as set forth on Schedule 4.33, neither
National nor any Subsidiary owes or has any obligations (contingent or
otherwise) in respect to any Minority Equity Interest.
4.34 Absence of Activity. Alberta has never (i) owned or
-------------------
acquired, or agreed to acquire, any assets or property, (ii) incurred
or became subject to, or agreed to incur or become subject to, any
obligations or liabilities (whether absolute, contingent or otherwise,
known or unknown, and whether due or to become due), (iii) conducted
any business whatsoever, or (iv) taken any corporate action of any
nature whatsoever, including, without limitation, entering into any
agreement or arrangement, amending its articles or certificate of
documents, issuing any of its capital shares or other securities
(including any options, warrants or other rights to receive
securities), other than in
<PAGE>
connection with Alberta's initial organization or the authorization,
execution and delivery of this Agreement and the transactions
contemplated hereby.
4.35 No Misrepresentation. No representation or warranty
--------------------
of any Shareholder contained in this Agreement or in any schedule
hereto or in any certificate or other instrument furnished by any
Shareholder to the Purchaser pursuant to the terms hereof, contains
any untrue statement of a material fact or omits to state a material
fact necessary to make the statements contained herein or therein not
misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser hereby represents and warrants to the
Shareholders that:
5.1 Organization and Good Standing. The Purchaser is a
------------------------------
corporation duly organized, validly existing and in good standing
under the laws of the Province of Alberta.
5.2 Authorization of Agreement. The Purchaser has full
--------------------------
corporate power and authority to execute and deliver this Agreement
and each other agreement, document, instrument or certificate
contemplated by this Agreement or to be executed by the Purchaser in
connection with the consummation of the transactions contemplated
hereby and thereby (the "Purchaser Documents"), and to consummate the
transactions contemplated hereby and thereby. The execution, delivery
and performance by the Purchaser of this Agreement and each Purchaser
Document have been duly authorized by all necessary corporate action
on behalf of the Purchaser. This Agreement has been, and each
Purchaser Document will be at or prior to the Closing, duly executed
and delivered by the Purchaser and (assuming the due authorization,
execution and delivery by the other parties hereto and thereto) this
Agreement constitutes, and each Purchaser Document when so executed
and delivered will constitute, legal, valid and binding obligations of
the Purchaser, enforceable against the Purchaser in accordance with
their respective terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally, and subject, as to enforceability, to
general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
<PAGE>
5.3 Conflicts; Consents of Third Parties.
------------------------------------
(a) Except as set forth on Schedule 5.3 hereto, none of
the execution and delivery by the Purchaser of this Agreement and of
the Purchaser Documents, the consummation by the Purchaser of the
transactions contemplated hereby and thereby, or compliance by the
Purchaser with any of the provisions hereof or thereof will (i)
conflict with, or result in the breach of, any provision of the
certificate of incorporation or by-laws of the Purchaser, (ii)
conflict with, violate, result in the breach or termination of,
constitute a default under, or give rise to any right of acceleration
under, any note, bond, mortgage, indenture, license, agreement or
other instrument or obligation to which the Purchaser is a party or by
which the Purchaser or its properties or assets is bound or (iii)
violate any statute, rule, regulation, judgment or Order of any
Governmental Body by which the Purchaser is bound.
(b) Except as set forth on Schedule 5.3, no consent,
waiver, approval, Order, Permit or authorization of, or declaration or
filing with, or notification to, any Person or Governmental Body is
required on the part of the Purchaser in connection with the execution
and delivery of this Agreement or the Purchaser Documents or the
compliance by Purchaser with any of the provisions hereof or thereof.
5.4 Litigation. There are no Legal Proceedings pending
----------
or, to the best knowledge of the Purchaser, threatened that are
reasonably likely to prohibit or restrain the ability of the Purchaser
to enter into this Agreement or consummate the transactions
contemplated hereby.
5.5 Investment Intention. The Purchaser is acquiring the
--------------------
Seller Shares and the Tri-S Shares for its own account, for investment
purposes only and not with a view to the resale or distribution (as
such term is used in Section 2(11) of the Securities Act) thereof.
Purchaser understands that the Shares have not been registered under
the Securities Act and cannot be sold unless subsequently registered
under the Securities Act or an exemption from such registration is
available.
5.6 Financial Advisors. No Person has acted, directly or
------------------
indirectly, as a broker, finder or financial advisor for the Purchaser
in connection with the transactions contemplated by this Agreement and
no Person is entitled to any fee or commission or like payment in
respect thereof.
<PAGE>
ARTICLE VI
COVENANTS
6.1 Access to Information. National, the Shareholders and
---------------------
the Tri-S Shareholders agree that, prior to the Closing Date, the
Purchaser shall be entitled, through its officers, employees and
representatives (including, without limitation, its legal advisors and
accountants), to make such investigation of the properties, businesses
and operations of National and its Subsidiaries and such examination
of the books, records and financial condition of National and its
Subsidiaries as it reasonably requests and to make extracts and copies
of such books and records. Any such investigation and examination
shall be conducted during regular business hours and under reasonable
circumstances, and National the Tri-S Shareholders and the
Shareholders shall cooperate, and shall cause the Subsidiaries to
cooperate, fully therein. No investigation by the Purchaser prior to
or after the date of this Agreement shall diminish or obviate any of
the representations, warranties, covenants or agreements of the
Shareholders or the Tri-S Shareholders contained in this Agreement,
the Shareholder/National Documents or the Tri-S Documents. In order
that the Purchaser may have full opportunity to make such physical,
business, accounting and legal review, examination or investigation as
it may reasonably request of the affairs of National and its
Subsidiaries, National and the Shareholders shall cause the officers,
employees, consultants, agents, accountants, attorneys and other
representatives of National and its Subsidiaries to cooperate fully
with such representatives in connection with such review and
examination.
6.2 Conduct of the Business Pending the Closing.
-------------------------------------------
(a) Except as otherwise expressly contemplated by this
Agreement or with the prior written consent of the Purchaser, until
the Closing Date, each of National and the Shareholders shall, and
shall cause each of the Subsidiaries to:
(i) conduct the respective businesses of National and its
Subsidiaries only in the ordinary course consistent with past
practice;
(ii) use its best efforts to (A) preserve its present
business operations, organization (including, without limitation,
management and the sales force) and goodwill of National and its
Subsidiaries and (B) preserve its present
<PAGE>
relationship with Persons having business dealings with National
and its Subsidiaries;
(iii) maintain (A) all of the assets and properties of each
of National and its Subsidiaries in their current condition,
ordinary wear and tear excepted and (B) insurance upon all of the
properties and assets of National and its Subsidiaries in such
amounts and of such kinds comparable to that in effect on the
date of this Agreement;
(iv) (A) maintain the books, accounts and records of each
of National and its Subsidiaries in the ordinary course of
business consistent with past practices, (B) continue to collect
accounts receivable and pay accounts payable utilizing normal
procedures and without discounting or accelerating payment of
such accounts, and (C) comply with all contractual and other
obligations applicable to the operation of each of National and
its Subsidiaries;
(v) promptly pay and discharge all liabilities (including
liabilities for services rendered or goods delivered to National)
that are due and payable by it prior to the Closing Date except
where such liabilities are being disputed in good faith by
appropriate proceedings; and
(vi) comply in all material respects with applicable Laws,
including, without limitation, Environmental Laws.
(b) Except as otherwise expressly contemplated by this
Agreement or with the prior written consent of the Purchaser, until
the Closing Date, National, the Shareholders and the Tri-S
Shareholders shall not, and shall cause each of National and its
Subsidiaries not to:
(i) except as expressly provided in Section 1.3, declare,
set aside, make or pay any dividend or other distribution in
respect of the capital stock of National or repurchase, redeem or
otherwise acquire any outstanding shares of the capital stock or
other securities of, or other ownership interests in, National or
any of its Subsidiaries;
(ii) except as provided in Sections 6.15 and 6.17,
transfer, issue, sell or dispose of any shares of capital stock,
partnership interests or other securities of National or any of
its Subsidiaries or grant options, warrants, calls or other
rights to purchase or otherwise acquire shares of the capital
stock, partnership interests or other securities of National or
any of its Subsidiaries;
<PAGE>
(iii) effect any recapitalization, reclassification, stock
split or like change in the capitalization of National or any of
its Subsidiaries;
(iv) amend the certificate of incorporation, by-laws,
certificate of limited partnership or partnership agreement of
National or any of its Subsidiaries;
(v) Except as set forth on Schedule 6.2, (A) increase the
annual level of compensation of any employee of National or any
of its Subsidiaries whose annual compensation exceeds C$50,000,
other than any such increases of less than 5% in the aggregate
granted in the ordinary course of business consistent with past
practice, (B) increase the annual level of compensation payable
or to become payable by National or any of its Subsidiaries to
any of their respective executive officers, (C) grant any bonus,
benefit or other direct or indirect compensation to any employee,
director or consultant whose annual compensation exceeds
C$50,000, other than in the ordinary course consistent with past
practice and in such amounts as are fully reserved against in the
Financial Statements, (D) except for the Employment Agreement
increase the coverage or benefits available under any (or create
any new) severance pay, termination pay, vacation pay, company
awards, salary continuation for disability, sick leave, deferred
compensation, bonus or other incentive compensation, insurance,
pension or other employee benefit plan or arrangement made to,
for, or with any of the directors, officers, employees, agents or
representatives of National or any of its Subsidiaries or
otherwise modify or amend or terminate any such plan or
arrangement or (E) enter into any employment, deferred compensa-
tion, severance, consulting, non-competition or similar agreement
(or amend any such agreement) to which National or any of its
Subsidiaries is a party or involving a director, officer or
employee of National or any of its Subsidiaries in his or her
capacity as a director, officer or employee of National or any of
its Subsidiaries;
(vi) except for trade payables and for indebtedness for
borrowed money incurred in the ordinary course of business and
consistent with past practice, borrow monies for any reason or
draw down on any line of credit or debt obligation, or become the
guarantor, surety, endorser or otherwise liable for any debt,
obligation or liability (contingent or otherwise) of any other
Person;
<PAGE>
(vii) subject to any Lien, any of the Assets;
(viii) acquire any material properties or assets or sell,
assign, transfer, convey, lease or otherwise dispose of any of
the Assets, except (other than with respect to the Stores or the
Business) for fair consideration in the ordinary course of
business consistent with past practice of National and its
Subsidiaries;
(ix) cancel or compromise any debt or claim or waive or
release any material right of National or any of its Subsidiaries
except in the ordinary course of business consistent with past
practice;
(x) enter into any commitment for Capital Expenditures of
National and its Subsidiaries;
(xi) enter into, modify or terminate any labor or
collective bargaining agreement of National or any of its
Subsidiaries or, through negotiation or otherwise, make any
commitment or incur any liability to any labor organization with
respect to National or any of its Subsidiaries;
(xii) introduce any material change with respect to the
operation of National or any of its Subsidiaries, including any
material change in the types, nature, composition or quality of
its products or services or, other than in the ordinary course of
business, make any change in product specifications or prices or
terms of distributions of such products;
(xiii) permit National or any of its Subsidiaries to enter
into any transaction or to make or enter into any Contract which
by reason of its size or otherwise is not in the ordinary course
of business consistent with past practice;
(xiv) become obligated to develop any new locations;
(xv) permit National or any of its Subsidiaries to (i)
enter into or agree to enter into any merger or consolidation
with any Person or (ii) engage in any new business or invest in,
make a loan, advance or capital contribution to, or otherwise
acquire the securities of, any other Person;
<PAGE>
(xvi) except for transfers of cash pursuant to normal cash
management practices, permit National or any of its Subsidiaries
to make any investments in or loans to, or pay any fees or
expenses to, or enter into or modify any Contract with, any
Shareholder or any Tri-S Shareholder or any shareholder, partner
or Affiliate of any Shareholder or any Tri-S Shareholder;
(xvii) restructure, change, modify or renegotiate the terms
of any obligation of National to another Person which
restructuring, change, modification or renegotiation has the
effect of extending, delaying or deferring the time for payment
or performance of any such obligation, other than in the ordinary
course of business consistent with past practice;
(xviii) agree to do anything prohibited by this Section 6.2
or take or omit to take any action which would make any of the
representations and warranties of the Shareholders or the Tri-S
Shareholders in this Agreement or the Shareholder/National
Documents or the Tri-S Documents untrue or incorrect in any
material respect as of any time through and including the Closing
Date; or
(xix) make any material Tax allocation or settle or
compromise any Tax liability for an amount materially in excess
of the liability therefor that is reflected on the financial
statements of National (or any Subsidiary of National), as the
case may be.
6.3 Consents. National, the Shareholders and the Tri-S
--------
Shareholders shall use their best efforts, and the Purchaser shall
cooperate with National and the Shareholders, to obtain at the
earliest practicable date all consents, waivers, approvals, Orders,
Permits and authorizations of any Person or Governmental Body required
to consummate the transactions contemplated by this Agreement,
including, without limitation, the consents, waivers, approvals,
Orders, Permits and authorizations of any Person or Governmental Body
referred to in Section 4.6(b) hereof.
6.4 Consents to Real Property Leases. National and the
--------------------------------
Shareholders shall use their best efforts to obtain all consents and
estoppels from landlords and lessors which are required to be obtained
to consummate the transactions contemplated by this Agreement pursuant
to the terms of any of the Real Property Leases.
<PAGE>
6.5 No Solicitation. None of National, the Shareholders
---------------
or the Tri-S Shareholders will, nor will they cause or permit National
or any Subsidiary or any of National's or any Subsidiary's directors,
officers, employees, representatives or agents (collectively, the
"Representatives") to, directly or indirectly, (i) discuss, negotiate,
undertake, authorize, recommend, propose or enter into, either as the
proposed surviving, merged, acquiring or acquired corporation, any
transaction involving a merger, consolidation, business combination,
purchase or disposition of any capital stock or other equity interest
in, or material assets of, National or any of its Subsidiaries other
than the transactions set forth in this Agreement (an "Acquisition
Transaction"), (ii) facilitate, encourage, solicit or initiate
discussions, negotiations or submissions of proposals or offers in re-
spect of an Acquisition Transaction, (iii) furnish or cause to be
furnished, to any Person, any information concerning the business,
operations, properties or assets of National or any of its
Subsidiaries in connection with an Acquisition Transaction, or (iv)
otherwise cooperate in any way with, or assist or participate in,
facilitate or encourage, any effort or attempt by any other Person to
do or seek any of the foregoing. National, the Shareholders and the
Tri-S Shareholders will inform the Purchaser in writing immediately
following the receipt by any Shareholder, Tri-S Shareholder, National,
any Subsidiary or any Representative of any proposal or inquiry in
respect of any Acquisition Transaction.
6.6 Preservation of Records. Subject to Section 6.14(b)
-----------------------
hereof (relating to the preservation of Tax records), the
Shareholders, the Tri-S Shareholders and the Purchaser agree that each
of them shall preserve and keep the records held by any of them
relating to the business of National and its Subsidiaries for a period
of four years from the Closing Date and shall make such records and
personnel available to the other as may be reasonably required by such
party in connection with, among other things, any insurance claims by,
legal proceedings against or governmental investigations of the
Shareholders, the Tri-S Shareholders or the Purchaser or any of their
Affiliates or in order to enable the Shareholders, the Tri-S
Shareholders or the Purchaser to comply with their respective
obligations under this Agreement, the Non-Competition Agreements and
each other agreement, document or instrument contemplated hereby or
thereby. In the event any of the Shareholders, the Tri-S Shareholders
or the Purchaser wishes to destroy such records after that time, such
party shall first give ninety (90) days prior written notice to the
other and such other party shall have the right at its option and
expense, upon prior written notice given to such party
<PAGE>
within that ninety (90) day period, to take possession of the records
within one hundred and eighty (180) days after the date of such
notice.
6.7 Publicity. Except for agreed to disclosures made by
---------
National and/or its Subsidiaries' franchisees, none of National, the
Shareholders, Tri-S Shareholders or the Purchaser shall issue any
press release or public announcement concerning this Agreement or the
transactions contemplated hereby without obtaining the prior written
approval of the other parties hereto, which approval will not be
unreasonably withheld or delayed, unless, in the sole judgment of the
Purchaser, disclosure is otherwise required by applicable Law,
provided that, to the extent required by applicable law, the party
intending to make such release shall use its best efforts consistent
with such applicable law to consult with the other party with respect
to the text thereof.
6.8 Repayment of Loans. On or prior to the Closing Date
------------------
(i), all loans or other advances by National or any Subsidiary to the
Shareholders, the Tri-S Shareholders or any of their Affiliates (the
"Affiliate Loans"), including any accrued and unpaid interest thereon,
shall be repaid in full and, (ii) the guaranty set forth on Schedule
4.9 shall have been released and discharged in full.
6.9 Use of Name. The Shareholders and the Tri-S
-----------
Shareholders hereby agree that upon the consummation of the
transactions contemplated hereby, the Purchaser and National shall
have the sole right to the use of the names "National Money Mart",
"Money Mart of Canada", "Money Mart" and "Insta Cheques" and the
Shareholders and the Tri-S Shareholders shall not, and shall not cause
or permit any Affiliate to, use such names or any variation or
simulation thereof in any business or manner, either involving check
cashing or otherwise.
6.10 Environmental Matters. National and the Shareholders
---------------------
shall identify the Environmental Permits required by Purchaser to
operate the business of National and its Subsidiaries and shall
promptly file all materials required under Environmental Laws
(including, without limitation, foreign or state property transfer
laws) and all requests required for the issuance, transfer or
reissuance to Purchaser of all such Permits prior to the Closing Date.
6.11 Non-Competition Agreements. Each Shareholder and Mrs.
--------------------------
Clark hereby agree that, on or prior to the Closing Date, such Person
shall execute and deliver to Purchaser a Non-
<PAGE>
Competition Agreement, substantially in the form of Exhibit A hereto.
6.12 Shareholder Releases. Each Shareholder and Mrs.
--------------------
Clark hereby agree that, on or prior to the Closing Date, such Person
shall execute and deliver to the Purchaser and National a release,
substantially in the form of Exhibit E hereto (the "Shareholder
Release").
6.13 Capital Contribution. The Purchaser (or any of its
--------------------
Affiliates) shall (i) advance, concurrently with Closing, funds in an
amount sufficient for National to pay the Bonuses, Dividends and
Shareholder Loans, based upon National's October 31, 1996 internally
prepared unaudited financial statements and (ii) cause National to
make or cause to be made the payments referred to in clause (i).
6.14 Tax Matters.
-----------
(a) Preparation of Tax Returns; Payment of Taxes.
--------------------------------------------
(i) Taxes, if any, attributable to the taxable
period of Tri-S, National or any Subsidiary of National beginning
before and ending after the Closing Date shall be allocated to the
Shareholders and Mrs. Clark for the period up to and including the
Closing Date, and to Purchaser for the period subsequent to the
Closing Date. For purposes of this Section 6.14(a), Taxes for the
period up to and including the Closing Date and for the period
subsequent to the Closing Date shall be determined on the basis of an
interim closing of the books as of the Closing Date or, to the extent
not susceptible to such allocation, by apportionment on the basis of
elapsed days.
(ii) The Shareholders' Representative shall be
responsible for filing or causing to be filed all Tax Returns required
to be filed by or on behalf of Tri-S, National and each Subsidiary of
National and/or their operations and assets on or before the Closing
Date (taking into account applicable extensions) and shall pay or
cause to be paid any Taxes shown to be due thereon. The Shareholders
and Mrs. Clark shall not be responsible for the filing of Tax Returns
required to be filed as a result of the change of control arising as a
result of the consummation of the transactions contemplated by this
agreement. The Shareholders' Representative shall be given the
opportunity to participate in the preparation and filing of all such
Tax Returns, and National shall prepare such Tax Returns in a manner
consistent with past practices and shall provide copies of such Tax
Returns to Purchaser and the Shareholders' Representative for
<PAGE>
Purchaser's and the Shareholders' Representative's review and comment
at least fifteen (15) Business Days prior to filing. Purchaser shall
be responsible for filing or causing to be filed all Tax Returns
required to be filed by or on behalf of Tri-S, National and any
Subsidiary of National and/or their operations and assets after the
Closing Date (taking into account applicable extensions) and shall pay
or cause to be paid any Taxes shown to be due thereon subject to the
amount of any Taxes that are the responsibility of the Shareholders or
Mrs. Clark pursuant to Section 6.14(a)(iii).
(iii) With respect to any Tax Return of Tri-S,
National and each Subsidiary of National required to be filed by
Purchaser for a taxable period of Tri-S, National or any Subsidiary of
National beginning before and ending on or after the Closing Date,
Purchaser shall provide the Shareholders' Representative with a
statement setting forth the amount of Tax shown on such Tax Return for
which the Shareholders and Mrs. Clark are responsible pursuant to
Section 6.14(a)(i) (the "Statement") at least fifteen (15) business
days prior to the due date for filing of such Tax Return (including
extensions). Not later than five (5) business days before the due
date for payment of Taxes with respect to such Tax Return, the
Shareholders and Mrs. Clark shall pay to Purchaser an amount equal to
the Taxes shown on the Statement as being the responsibility of the
Shareholders and Mrs. Clark pursuant to Section 6.14(a)(i) hereof. No
payment pursuant to this Section 6.14(a)(iii) shall excuse the
Shareholders or Mrs. Clark from their indemnification obligations
pursuant to Section 9.5 hereof should the amount of Taxes as
ultimately determined (on audit or otherwise), for the periods covered
by such Tax Returns and which are the responsibility of the
Shareholders or Mrs. Clark exceed the amount of the Shareholders' or
Mrs. Clark's payment under this Section 6.14(a)(iii).
(iv) Neither the Shareholders nor Mrs. Clark may file
any amended Tax Returns or refund claims in respect of any taxable
period of National or any Subsidiary of National or Tri-S ending on or
prior to the Closing Date without the prior written consent of
Purchaser.
(b) Cooperation with Respect to Tax Returns. Purchaser,
---------------------------------------
Shareholders and Mrs. Clark agree to furnish or cause to be furnished
to each other, and each at their own expense, as promptly as
practicable, such information (including access to books and records)
and assistance, including making employees available on a mutually
convenient basis to provide additional information and explanations of
any material provided, relating
<PAGE>
to Tri-S, National and any Subsidiary of National as is reasonably
necessary for the filing of any Tax Return, for the preparation for
any audit, and for the prosecution or defense of any claim, suit or
proceeding relating to any adjustment or proposed adjustment with
respect to Taxes. Purchaser, Shareholders and Mrs. Clark shall
retain all information, records or documents in their possession
relating to Tri-S, National and any Subsidiary of National that might
be relevant to computations or payments required after the Closing
Date with respect to Tax matters relating to any taxable period ending
on, prior to or including the Closing Date until the expiration of the
relevant statute of limitations or extensions thereof or, if a
proceeding has been instituted for which the information, records or
documents is required, until there is a final determination with
respect to such proceeding.
(c) Tax Audits.
----------
(i) Purchaser shall promptly notify the
Shareholders' Representative upon receipt by Purchaser, Tri-S or
National or any Subsidiary of National of written notice of any Tax
audits of or proposed assessments against Tri-S, National or any
Subsidiary of National for taxable periods of Tri-S, National or any
Subsidiary of National ending on or prior to the Closing Date;
provided, however, that the failure of Purchaser to give the
-------- -------
Shareholders' Representative prompt notice as required herein shall
not relieve the Shareholders or Mrs. Clark of any of its obligations
to pay such Taxes except and to the extent that the Shareholders or
Mrs. Clark are actually and materially prejudiced thereby. Purchaser
shall have the right to represent Tri-S's, National's or any
Subsidiary of National's interests in any such Tax audit or
administrative or court proceeding and to employ counsel of its
choice; provided, that Purchaser may not agree to a settlement or
--------
compromise thereof without the prior consent of the Shareholders which
consent will not be unreasonably withheld. The Shareholders and Mrs.
Clark agree that they will cooperate fully with Purchaser and its
counsel in the defense against or compromise of any claim in any said
audit or proceeding.
(ii) The Shareholders' Representative shall promptly
notify Purchaser upon receipt by the Shareholders or Mrs. Clark of
written notice of any Tax audit or proposed assessment or other
proposed change or adjustment which may affect Tri-S, National or any
Subsidiary of National or its Tax attributes. The Shareholders'
Representative shall keep Purchaser duly informed of the progress
thereof and, if the results of such Tax audit or proceeding may have
an adverse effect on Tri-S, National or any Subsidiary of National,
<PAGE>
Purchaser or its Affiliates for any taxable period including or ending
after the Closing Date, then the Shareholders or Mrs. Clark may not
agree to a settlement or compromise thereof without Purchaser's
consent, which consent will not be unreasonably withheld.
(d) Transfer Taxes. The Shareholders and Mrs. Clark shall
--------------
be jointly and severally liable for and shall pay (and shall indemnify
and hold harmless Purchaser against) all sales, use, stamp,
documentary, filing, recording, transfer or similar fees or taxes or
governmental charges as levied by any taxing authority or governmental
agency in connection with the transactions contemplated by this
Agreement (other than taxes measured by or with respect to income
imposed on Purchaser or its Subsidiaries). The Shareholders and Mrs.
Clark hereby agree to file all necessary documents (including, but not
limited to, all Tax Returns) with respect to all such amounts in a
timely manner.
6.15 Transfer to Alberta. Clark shall, prior to the
-------------------
Closing, transfer to Alberta, pursuant to documentation satisfactory
to Purchaser, the 3,528 shares of Common Stock owned by Clark on the
date hereof and to be sold by Alberta to Purchaser pursuant to this
Agreement.
6.16 Obligations of Tri-S. On or prior to the Closing
--------------------
Date, all loans, obligations or other advances owing by Tri-S to any
other Person (including, without limitation, the Promissory Note,
dated January 5, 1995 made by Tri-S in favor of Mark McDonald) shall
have been released and discharged in full.
6.17 Transfer to Mrs. Clark. Tri-S shall, prior to the
----------------------
Closing, transfer to Mrs. Clark, pursuant to documentation
satisfactory to Purchaser, record ownership of the [2,500] shares of
Common Stock held of record by Tri-S on the date hereof and to be sold
by Mrs. Clark to Purchaser pursuant to this Agreement.
ARTICLE VII
CONDITIONS TO CLOSING
7.1 Conditions Precedent to Obligations of Purchaser. The
------------------------------------------------
obligation of the Purchaser to consummate the transactions
contemplated by this Agreement is subject to the fulfillment, on or
prior to the Closing Date, of each of the following conditions (any or
all of which may be waived by the Purchaser in whole or in part):
<PAGE>
(a) all representations and warranties of the Shareholders
and the Tri-S Shareholders contained herein shall be true and correct
as of the date hereof;
(b) all representations and warranties of the Shareholders
and the Tri-S Shareholders contained herein qualified as to
materiality shall be true and correct, and the representations and
warranties of the Shareholders and the Tri-S Shareholders contained
herein not qualified as to materiality shall be true and correct in
all material respects, at and as of the Closing Date with the same
effect as though those representations and warranties had been made
again at and as of that time;
(c) the Shareholders, the Tri-S Shareholders and National
shall have performed and complied in all material respects with all
obligations and covenants required by this Agreement to be performed
or complied with by them on or prior to the Closing Date;
(d) the Purchaser shall have been furnished with
certificates (dated the Closing Date and in form and substance
reasonably satisfactory to the Purchaser) executed by each Shareholder
and each Tri-S Shareholder certifying as to the fulfillment of the
conditions specified in Sections 7.1(a), 7.1(b) and 7.1(c) hereof;
(e) certificates representing 100% of the Seller Shares
and the Tri-S Shares shall have been, or shall at the Closing be,
validly delivered and transferred to the Purchaser, free and clear of
any and all Liens;
(f) the Purchaser shall have obtained all consents and
waivers referred to in Section 5.3 hereof with respect to the
transactions contemplated by this Agreement and the Purchaser
Documents and the Tri-S Shareholders;
(g) there shall not have been or occurred any Material
Adverse Change since December 31, 1995;
(h) the Shareholders and the Tri-S Shareholders shall have
obtained all consents and waivers referred to in Section 4.6 hereof,
in a form reasonably satisfactory to the Purchaser, with respect to
the transactions contemplated by this Agreement the
Shareholder/National Documents and the Tri-S Documents;
(i) no Legal Proceedings shall have been instituted or
threatened or claim or demand made against any of the
<PAGE>
Shareholders and the Tri-S Shareholders, National or any of its
Subsidiaries, or the Purchaser or any of its Affiliates seeking to
restrain or prohibit or to obtain substantial damages with respect to
the consummation of the transactions contemplated hereby, and there
shall not be in effect any Order by a Governmental Body of competent
jurisdiction restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated hereby;
(j) all Affiliate Loans shall have been repaid to National
prior to the Closing Date;
(k) the Shareholders and the Tri-S Shareholders shall have
furnished, or caused to be furnished, to Purchaser, in form and
substance satisfactory to Purchaser, such certificates and other
evidence as Purchaser may have reasonably requested as to the
satisfaction of the conditions contained in this Section and as to
such other matters relating to the representations, warranties,
covenants and undertakings in this Agreement as Purchaser may
reasonably request;
(l) any necessary consents from the landlords and lessors
under each Real Property Lease shall have been obtained in form and
substance satisfactory to Purchaser acting reasonably;
(m) each of the directors and officers of National and the
Subsidiaries and Tri-S shall deliver to the Purchaser as of the
Closing Date his or her resignation as an officer, director and
employee of National and the Subsidiaries and Tri-S (as the case may
be) and shall grant to National and the Subsidiaries a full and final
release in respect of any and all liabilities of National and the
Subsidiaries and Tri-S to such person;
(n) the Shareholders and Mrs. Clark shall have delivered
to the Purchaser an affidavit attesting that each of them is a
resident of Canada within the meaning of Section 116 of the Tax Act;
(o) the Purchaser shall have received duly executed copies
of each of the documents enumerated in Section 8.1;
(p) the Purchaser shall have obtained, upon terms
acceptable to it, financing for the transaction contemplated hereby
pursuant to Dollar Financial Group, Inc.'s offering of approximately
$100,000,000 in aggregate principal amount of its Senior Subordinated
Notes due 2006;
<PAGE>
(q) the Shareholders and shall have furnished to
Purchaser, in form and substance satisfactory to Purchaser, all
documentation evidencing the transfer by Clark to Alberta of the 3,528
shares of Common Stock owned by Clark on the date hereof and to be
sold by Alberta to Purchaser pursuant to this Agreement;
(r) the Shareholders and Mrs. Clark shall have furnished
to Purchaser, in form and substance satisfactory to Purchaser,
evidence of the release and discharge of all loans, obligations and
advances referred to in Section 6.16;
(s) the Shareholders and Mrs. Clark shall have furnished
to Purchaser, in form and substance satisfactory to Purchaser, all
documentation evidencing the transfer by Tri-S to Mrs. Clark of record
ownership of the [2,500] shares of Common Stock held of record by Tri-
S on the date hereof and to be sold by Mrs. Clark pursuant to this
Agreement; and
(t) all Excluded Assets shall have been distributed as set
forth on Schedule 1.3.
7.2 Conditions Precedent to Obligations of the
------------------------------------------
Shareholders and the Tri-S Shareholders. The obligations of the
---------------------------------------
Shareholders and Mrs. Clark to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, prior
to or on the Closing Date, of each of the following conditions (any or
all of which may be waived by the Shareholders' Representative in
whole or in part to the extent permitted by applicable law):
(a) all representations and warranties of the Purchaser
and DFG contained herein shall be true and correct as of the date
hereof;
(b) all representations and warranties of the Purchaser
and DFG contained herein qualified as to materiality shall be true and
correct, and all representations and warranties of the Purchaser and
DFG contained herein not qualified as to materiality shall be true and
correct in all material respects, at and as of the Closing Date with
the same effect as though those representations and warranties had
been made again at and as of that date;
(c) the Purchaser shall have performed and complied in all
material respects with all obligations and covenants required by this
Agreement to be performed or complied with by Purchaser on or prior to
the Closing Date;
<PAGE>
(d) the Shareholders and Mrs. Clark shall have been
furnished with a certificate (dated the Closing Date and in form and
substance reasonably satisfactory to the Shareholders and Mrs. Clark)
executed by the Chief Executive Officer of the Purchaser certifying as
to the fulfillment of the conditions specified in Sections 7.2(a),
7.2(b) and 7.2(c);
(e) certificates representing 324.77 shares of DFG Common
Stock shall have been, or shall at the Closing be, delivered to the
DFG Stock Purchasers free and clear of any and all Liens except for
those evidenced by or arising in connection with the Shareholders
Agreement;
(f) no Legal Proceedings shall have been instituted or
threatened or claim or demand made against any of the Shareholders or
the Tri-S Shareholders seeking to restrain or prohibit or to obtain
substantial damages with respect to the consummation of the
transactions contemplated hereby, and there shall not be in effect any
Order by a Governmental Body of competent jurisdiction restraining,
enjoining or otherwise prohibiting the consummation of the
transactions contemplated hereby;
(g) the cash portion of the Purchase Price shall at the
Closing be delivered to the Shareholders' Representative;
(h) the Shareholders and Mrs. Clark shall have received
duly executed copies of each of the documents enumerated in Section
8.2; and
(i) the Purchaser (or any of its Affiliates) shall have
advanced funds to National in a sufficient amount to pay all Bonuses,
Dividends and Shareholders Loans, and shall have caused National to
pay same.
ARTICLE VIII
DOCUMENTS TO BE DELIVERED
8.1 Documents to be Delivered by the Shareholders and the
-----------------------------------------------------
Tri-S Shareholders. At the Closing, the Shareholders and the Tri-S
------------------
Shareholders shall deliver, or cause to be delivered, to the Purchaser
the following:
(a) stock certificates representing (i) the Seller Shares
and the Tri-S Shares, duly endorsed in blank or accompanied by stock
transfer powers and with all requisite stock
<PAGE>
transfer tax stamps attached, and (ii) the Other Shares, registered in
the name of Tri-S;
(b) the certificates referred to in Section 7.1(d) hereof;
(c) the opinion of Bishop & McKenzie, counsel to the
Shareholders and Mrs. Clark, in substantially the form of Exhibit C
hereto;
(d) copies of all consents and waivers referred to in
Section 7.1(h) hereof;
(e) written evidence of the repayment to National of all
Affiliate Loans;
(f) Non-Competition Agreements, substantially in the form
of Exhibit A hereto, duly executed by each Shareholder and Mrs. Clark;
(g) written resignations of each of the directors of
National and Tri-S;
(h) certificates of good standing with respect to Tri-S,
National and each of its Subsidiaries issued by the Registrar of
Corporations and for each jurisdiction in which such Person is
qualified to do business as a foreign corporation;
(i) duly executed copies of the Shareholders Agreement,
executed by each DFG Stock Purchaser;
(j) Shareholder Releases, substantially in the form of
Exhibit E hereto, duly executed by each Shareholder and Mrs. Clark;
(k) an Employment Agreement with Clark, substantially in
the form of Exhibit F hereto, executed by Clark and the Purchaser;
(l) for each DFG Stock Purchaser, a completed Form 20A as
required under the Act;
(m) the documents referred to in Section 7.1(q), 7.1(r)
and 7.1(s) hereof; and
(n) such other documents as the Purchaser shall reasonably
request.
<PAGE>
8.2 Documents to be Delivered by the Purchaser. At the
------------------------------------------
Closing, the Purchaser shall deliver to the Shareholders and Mrs.
Clark the following:
(a) evidence of the payments required to be made pursuant
to Section 2.2 hereof;
(b) the certificate referred to in Section 7.2(d) hereof;
(c) the opinion of counsel to the Purchaser and DFG, in
the form of Exhibit D hereto;
(d) certificates representing the DFG Common Stock
referred to in Section 2.3;
(e) an Employment Agreement with Clark, substantially in
the form of Exhibit F hereto, executed by Clark and the Purchaser;
(f) evidence of payment by National of all unpaid Bonuses,
Dividends and Shareholders' Loans; and
(g) such other documents as the Shareholders and Mrs.
Clark shall reasonably request.
ARTICLE IX
INDEMNIFICATION
9.1 Survival. The representations and warranties of the
--------
Shareholders, the Tri-S Shareholders, Purchaser and DFG shall remain
operative and in full force and effect for a period of twenty-four
(24) months after the Closing Date, regardless of any investigation or
statement as to the results thereof made by or on behalf of any party
hereto; provided that the representations and warranties contained in
Sections 4.3, 4.4, 4.7, 4.11, 4.16, 4.20, 4.34, 11.3, 11.13, 12.3,
12.4, 12.7, 12.9 and 12.11 shall survive indefinitely.
Notwithstanding anything to the contrary herein, any representation or
warranty which is the subject of a claim or dispute which is asserted
in writing prior to the expiration of the applicable period set forth
above shall survive with respect to such claim or dispute until the
final resolution and satisfaction thereof.
<PAGE>
9.2 General Indemnification.
-----------------------
(a) The Shareholders hereby agree, jointly and severally,
to indemnify and hold harmless the Purchaser and its Affiliates
(including, after the Closing, Tri-S, National and the Subsidiaries)
and their respective directors, officers, employees, agents,
successors and assigns (collectively, the "Purchaser Indemnified
Parties") from and against and in respect of any and all Losses
resulting from, arising out of, based on or relating to:
(i) the failure of any representation or warranty of any
Shareholder or of National set forth in this Agreement, any
Shareholder/National Document or any certificate or instrument
delivered by or on behalf of any Shareholder or National pursuant
to this Agreement, to be true and correct in all respects both as
of the date of this Agreement and on the Closing Date;
(ii) the breach of any covenant or other agreement on the
part of any Shareholder or of National under this Agreement or
any Shareholder/National Document;
(iii) any of the Excluded Liabilities;
(iv) (A) any Release of Hazardous Materials by or held on
behalf of (i) National or any of its Subsidiaries or (ii) any
Person for whose actions National or any of its Subsidiaries is
responsible in law in, on, at, or from the Company Properties
which occurred, or resulted from operations occurring, as of or
prior to the Closing; (B) any tort liability to third parties as
a result of any Releases or from exposure to Hazardous Materials
arising from any Releases as of or prior to the Closing; (C)
notification or designation under any Environmental Law as a
potentially responsible party for onsite or offsite disposal of
Hazardous Materials, which disposal occurred as of or prior to
the Closing; or (D) any other Environmental Costs and Liabilities
and any other Environmental Claim or Remedial Action resulting
from or based upon anything related to the property currently or
previously owned, leased or operated by National, any Subsidiary
or any of their respective predecessors thereof conducted prior
to Closing to the extent not fully reimbursable under a policy of
insurance under which coverage has not been denied; or
<PAGE>
(v) the Excluded Assets or the ownership, operation, lease
or use thereof, or any action taken with respect thereto, by
National, any Subsidiary or any other Person.
(b) The Shareholders and Mrs. Clark hereby agree, jointly
and severally, to indemnify and hold harmless the Purchaser
Indemnified Parties from and against and in respect of any and all
Losses resulting from, arising out of, based on or relating to:
(i) the failure of any representation or warranty of any
Tri-S Shareholder set forth in this Agreement or any Tri-S
Document or any certificate and instrument delivered by or on
behalf of any Tri-S Party pursuant to this Agreement, to be true
and correct in all respects both as of the date of this Agreement
and on the Closing Date;
(ii) the breach of any covenant or other agreement on the
part of any Tri-S Shareholder under this Agreement or any Tri-S
Document; and
(iii) any and all liabilities or obligations of Tri-S of any
kind, nature and description, absolute or contingent, known or
unknown, existing on or prior to the Closing Date or thereafter
coming into being or arising by reason of any state of facts
existing, or any transaction entered into, on or prior to the
Closing Date (including, without limitation, any such liabilities
arising under any Environmental Laws and any such liabilities
relating to Taxes).
(c) Purchaser hereby agrees to indemnify and hold harmless
the Shareholders and their respective Affiliates, and their respective
directors, officers, employees, agents, successors and assigns
(collectively, the "Shareholder Indemnified Parties") from and against
and in respect of any and all Losses resulting from, arising out of,
based on or relating to:
(i) the failure of any representation or warranty of the
Purchaser set forth in this Agreement or any Purchaser Document
or any certificate and instrument delivered by or on behalf of
the Purchaser pursuant to this Agreement, to be true and correct
in all respects both as of the date of this Agreement and on the
Closing Date;
(ii) the breach of any covenant or other agreement on the
part of the Purchaser under this Agreement or any Purchaser
Document; or
<PAGE>
(iii) any Contract Liabilities.
(d) DFG hereby agrees to indemnify and hold harmless the
Shareholders and their respective Affiliates, and their respective
directors, officers, employees, agents, successors and assigns from
and against and in respect of any and all Losses resulting from,
arising out of, based on or relating to:
(i) the failure of any representation or warranty of DFG
set forth in this Agreement or any DFG Document or any
certificate and instrument delivered by or on behalf of DFG
pursuant to this Agreement, to be true and correct in all
respects both as of the date of this Agreement and on the Closing
Date; and
(ii) the breach of any covenant or other agreement on the
part of DFG under this Agreement or any DFG Document.
9.3 Limitations on Indemnification for Breaches of
----------------------------------------------
Representations and Warranties. The Shareholders and Mrs. Clark,
------------------------------
collectively (together, the "Seller Indemnifying Parties"), shall not
have any liability under Section 9.2(a)(i) and 9.2(b)(i),
collectively, unless and until the aggregate amount of losses subject
to indemnification thereunder exceeds C$25,000 and in such event, the
Shareholders and/or Mrs. Clark shall be required to pay the entire
amount of such Losses in excess of C$25,000. The Purchaser and DFG,
collectively (together, the "Purchaser Indemnifying Parties"), shall
not have any liability under Section 9.2(c)(i) and 9.2(d)(i),
collectively, unless and until the aggregate amount of Losses subject
to indemnification thereunder exceeds C$25,000 and, in such event, the
Purchaser and/or DFG shall be requested to pay the entire amount of
such Losses in excess of C$25,000. The aggregate amount of Losses
subject to indemnification by the Seller Indemnifying Parties, on the
one hand, and by the Purchaser Indemnifying Parties on the other hand,
shall not exceed an amount equal to 28% of the Purchase Price in each
instance.
9.4 Indemnification Procedures. Except as provided in
--------------------------
Section 6.14 with respect to Taxes, for the purposes of administering
the indemnification provisions of Section 9.2, the following
procedures shall apply:
(a) If an indemnified party shall receive notice of any
action or proceeding by a third party with respect to which the
indemnified party asserts is indemnifiable under Section 9.2 (a
"Claim"), the indemnified party shall notify the indemnifying party
(the "Indemnitor") of such Claim in writing promptly
<PAGE>
following the receipt of notice of the commencement of such Claim.
The failure to give notice as required by this Section 9.4 in a timely
fashion shall not result in a waiver of any right to indemnification
hereunder except to the extent that the Indemnitor is actually
prejudiced thereby.
(b) Except as provided below, the Indemnitor shall be
entitled to assume the defense or settlement of any Claim of the type
referred to in clause (a) hereof (with counsel reasonably satisfactory
to the indemnified parties) if the Indemnitor shall provide the
indemnified parties a written acknowledgment of its liability to
indemnify such indemnified parties against all Losses resulting from,
relating to or arising out of such Claim. If the Indemnitor assumes
any such defense or settlement, it shall pursue such defense or
settlement in good faith. If the Indemnitor fails to elect in writing
to assume the defense of any Claim or to provide the written
acknowledgment provided for above within 10 days after the
notification referred to above, the indemnified party may engage
counsel to defend, settle or otherwise dispose of such Claim, which
counsel shall be reasonably satisfactory to the Indemnitor; provided,
--------
however, that the indemnified party shall not settle or compromise
-------
any such Claim without the consent of the Indemnitor (which consent
will not be unreasonably withheld or delayed).
(c) Notwithstanding anything to the contrary contained
herein, the Purchaser shall have the sole right, with counsel
reasonably satisfactory to the Indemnitor, to defend and settle in its
sole discretion any Claim which constitutes a Non-Assumable Claim and
no other party hereto shall be entitled to assume the defense thereof
or settle such claim. A "Non-Assumable Claim" means any claim, action
or proceeding (i) arising out of or in connection with, or relating
to, any violation or asserted violation of any Law, Order, judgment or
decree, (ii) involving any Governmental Body, or (iii) seeking
injunctive relief.
(d) In cases where the Indemnitor has elected to assume
the defense or settlement with respect to a Claim as provided above,
the Indemnitor shall be entitled to assume such defense or settlement
provided that: (i) the indemnified party (and its counsel) shall be
--------
entitled to continue to participate at its own cost in any such action
or proceeding or in any negotiations or proceedings to settle or
otherwise eliminate any claim for which indemnification is being
sought; (ii) the Indemnitor shall not be entitled to settle or
compromise any such claim without the consent or agreement of the
indemnified party (such consent not to be unreasonably withheld or
delayed); and
<PAGE>
(iii) after written notice by the Indemnitor to the indemnified party
of its election to assume control of the defense of any Claim, the
Indemnitor shall not be liable to such indemnified party hereunder for
any attorneys' fees and disbursements subsequently incurred by such
indemnified party in connection therewith.
9.5 Tax Matters.
-----------
(a) The Shareholders agree, jointly and severally, to
indemnify and hold harmless each of the Purchaser Indemnified Parties
from and against any and all Losses resulting from, arising out of,
based on or relating to:
(i) any and all Taxes with respect to all taxable periods
(or portions thereof) of National and any Subsidiary ending on or
prior to the Closing Date and, to the extent provided in Section
6.14(a) hereof, all taxable periods that include, and end after,
the Closing Date; and
(ii) any breach of any representation, warranty or covenant
contained in Sections 4.11 or 6.14 hereof; and
(iii) any Taxes for which the Shareholders are liable
pursuant to subsection 6.14(a) and 6.14(d) hereof.
(b) The Shareholders and Mrs. Clark agree, jointly and
severally, to indemnify and hold harmless each of the Purchaser
Indemnified Parties from and against any and all Losses resulting
from, arising out of, based on or relating to:
(i) any and all Taxes with respect to all taxable periods
(or portions thereof) of Tri-S ending on or prior to the Closing
Date and, to the extent provided in Section 6.14(a) hereof, all
taxable periods that include, and end after, the Closing Date;
and
(ii) any breach of any representation, warranty or covenant
contained in Sections 12.9 or 6.14 hereof; and
(iii) any Taxes for which Mrs. Clark is liable pursuant to
subsections 6.14(a) and 6.14(d) hereof.
(c) Any claim for indemnity made under this Section 9.5
may be made at any time prior to sixty days following the expiration
of the applicable Tax statute of limitations with respect to the
relevant taxable period (including extensions). If a claim for
indemnity under this Section 9.5 is not made
<PAGE>
within such time period, the Shareholders shall have no further
obligations in respect to such claim to the Purchaser.
9.6 Employee Benefits and Labor Indemnity. The
-------------------------------------
Shareholders hereby agree to jointly and severally indemnify and hold
the Purchaser Indemnified Parties harmless from and against any and
all Losses resulting from, arising out of or based on or relating to
any (i) Employee Benefit Plan, or (ii) the employment or termination
of employment of any Person prior to or up to the Closing with
National or any of its Subsidiaries including, without limitation, any
claim with respect to, relating to arising out of or in connection
with discrimination by National or any of its Subsidiaries or wrongful
discharge (including constructive discharge).
9.7 Waiver of Subrogation and Other Rights. Each
--------------------------------------
Shareholder and Mrs. Clark hereby agree that if, following the
Closing, any payment is made or required to be made by him, her or it
pursuant to the terms of this Agreement, the Shareholder/National
Documents or the Tri-S Documents (including without limitation this
Article IX), none of the Shareholders or Mrs. Clark shall have any
rights against National or any of the Subsidiaries or Tri-S, whether
by reason of subrogation or otherwise, in respect of any such
payments, and none of the Shareholders or Mrs. Clark shall take any
action against National or any of the Subsidiaries or Tri-S with
respect thereto. Any such rights which any Shareholder or Mrs. Clark
may, by operation of law or otherwise, have against National or any of
the Subsidiaries or Tri-S shall, effective at the time of the Closing,
be deemed to be hereby expressly and knowingly waived.
9.8 Right of Offset. Without in any way limiting any
---------------
other rights or remedies Purchaser may have at law or in equity, the
Purchaser and DFG shall have the right to set off against any
dividends, distributions or other payments that DFG would otherwise be
obligated to make in respect of any DFG Common Stock held by a
Shareholder or any of its transferees, the amount of any claim that
Purchaser may have for indemnification pursuant to this Agreement.
9.9 Treatment of Payment. The Shareholders, Mrs. Clark
--------------------
and Purchaser agree to treat any indemnity payment made pursuant to
Sections 9.2, 9.5 or 9.6 of this Agreement as an adjustment to the
Purchase Price for federal, state, provincial, local and foreign
income tax purposes.
<PAGE>
ARTICLE X
MISCELLANEOUS
10.1 Certain Definitions.
-------------------
For purposes of this Agreement, the following terms shall
have the meanings specified in this Section 10.1:
"Accounts Payable" means the aggregate dollar amount of
----------------
accounts payable, including all other current liabilities of National
and its Subsidiaries except those amounts unpaid in relation to
Bonuses, Dividends and Shareholder Loans (to the extent of the
payments required by Section 7.2(i) of this Agreement), as shall be
determined in accordance with GAAP, consistently applied, as of the
close of business on the Closing Date.
"Adjustment Amount" has the meaning ascribed thereto in
-----------------
Section 2.5.
"Affiliate" means, with respect to any Person, any other
---------
Person directly or indirectly controlling, controlled by or under
common control with such Person. For the purpose of this definition,
"control" of a Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of its
management or policies, whether through the ownership of voting
securities, by contract or otherwise.
"Affiliate Loans" shall have the meaning ascribed to such
---------------
term in Section 6.9 hereof.
"Agreed Prepaid Expenses" shall have the meaning ascribed to
-----------------------
such term in Section 1.4(b) hereof.
"Agreement" shall have the meaning ascribed to such term in
---------
the introductory paragraph hereto.
"Alberta" shall have the meaning ascribed to such term in
-------
the introductory paragraph hereto.
"Assets" shall have the meaning ascribed to such term in
------
Section 1.1 hereof.
"Assumed Contracts" shall have the meaning ascribed to such
-----------------
term in Section 4.15 hereof.
<PAGE>
"Bonuses" means National's net income from operations after
-------
management salaries (excluding bonuses payable to the Shareholders)
but before income tax minus the net income attributable to minority
interests, all as shall be determined in accordance with GAAP,
consistently applied, from January 1, 1991 through the close of
business on the Closing Date.
"Business" shall have the meaning ascribed to such term in
--------
Section 1.2(a) hereof.
"Business Day" means any day of the year on which national
------------
banking institutions in New York are open to the public for conducting
business and are not required or authorized to close.
"Calgary" has the meaning specified in Schedule 4.4(b).
-------
"Canadian Currency" and the "C$" sign each means the lawful
----------------- --
money of Canada.
"Capital Expenditures" means, for any Person for any period,
--------------------
the aggregate of all expenditures by such Person and its Subsidiaries,
except interest capitalized during construction, during such period
for property, plant or equipment, including, without limitation,
renewals, improvements, replacements and capitalized repairs, that
would be reflected as additions to property, plant or equipment on a
consolidated balance sheet of such Person and its Subsidiaries
prepared in conformity with GAAP. For the purpose of this definition,
the purchase price of equipment which is acquired simultaneously with
the trade-in of existing equipment owned by such Person or any of its
Subsidiaries or with insurance proceeds shall be included in Capital
Expenditures only to the extent of the gross amount of such purchase
price less the credit granted by the seller of such equipment being
traded in at such time or the amount of such proceeds, as the case may
be.
"Cash on Hand" means the sum of all cash in National's bank
------------
accounts or physically located in any of the Stores as of the close of
business on the Closing Date and other cash reported by National on
its books, in accordance with GAAP consistently applied, at the close
of business on the Closing Date; provided that Cash on Hand shall not
include any Reimbursable Security Deposits or any cash subject to any
lien, claim or encumbrance other than the security interests disclosed
in this Agreement to the Purchaser that are held by Bank of Montreal
as of the Closing Date.
<PAGE>
"Claim" shall have the meaning ascribed to such term in
-----
Section 9.4(a) hereof.
"Clark" shall mean Stephen A. Clark.
-----
"Closing" shall have the meaning ascribed to such term in
-------
Section 3.1 hereof.
"Closing Date" shall have the meaning ascribed to such term
------------
in Section 3.1 hereof.
"Closing Date Accounts Receivable" means the aggregate
--------------------------------
dollar amount of accounts receivable (including only the net book
value of Discount Receivables) of National and its Subsidiaries
excluding any accounts receivable of any MEI, as shall be determined
in accordance with GAAP (except as either provided above or in Section
1.2(b) of this Agreement), consistently applied, as of the close of
business on the Closing Date.
"Closing Date Financial Statements" has the meaning ascribed
---------------------------------
thereto in Section 2.5(a).
"Collectible Amounts" shall have the meaning ascribed to
-------------------
such term in Section 1.3 hereof.
"Common Stock" shall have the meaning ascribed to such term
------------
in Section 4.3 hereof.
"Company Property" shall have the meaning ascribed to such
----------------
term in Section 4.12(a) hereof.
"Contract" means any contract, agreement, indenture, note,
--------
bond, loan, instrument, lease, commitment or other arrangement or
agreement.
"Contract Liabilities" shall have the meaning ascribed to
--------------------
such term in Section 1.4(a) hereof.
"DFG" shall have the meaning ascribed to such term in the
---
recitals hereto.
"DFG Common Stock" means the Common Stock, par value $.001
----------------
per share, of DFG.
"DFG Stock Purchasers" means Alberta and Mark McDonald.
--------------------
<PAGE>
"Discount Receivables" shall have the meaning ascribed to
--------------------
such term in
Section 1.2 (b).
"Discount Receivables Amount" shall have the meaning
---------------------------
ascribed to such term in Section 1.2 (b).
"Dividends" means C$2,343,900 being an amount equal to the
---------
Retained Earnings of National, as determined in accordance with GAAP,
consistently applied, as of December 31, 1995 as of the close of
business on the Closing Date.
"EBITDA" shall have the meaning ascribed to such term in
------
Section 2.5 hereof.
"Eligible Acquisition" shall have the meaning ascribed to
--------------------
such term in Section 2.5 hereof.
"Employees" shall have the meaning ascribed to such term in
---------
Section 4.18 hereof.
"Employee Benefit Plans" shall have the meaning ascribed to
----------------------
such term in Section 4.16(a) hereof.
"Employment Agreement" means that certain employment
--------------------
agreement substantially in the form of Exhibit F hereto.
"Environmental Claim" means any accusation, allegation,
-------------------
notice of violation, action, claim, lien, demand, abatement or other
order or directive (conditional or otherwise) by any Governmental Body
or any other Person for personal injury (including sickness, disease
or death), tangible or intangible property damage, damage to the
environment, nuisance, pollution, contamination or other adverse
effects on the environment, or for fines, penalties or restrictions
resulting from or based upon (i) the existence, or the continuation of
the existence, of a Release (including, without limitation, sudden or
non-sudden accidental or non-accidental Releases) of, or exposure to,
any Hazardous Material, odor or audible noise in, into or onto the
environment (including, without limitation, the air, soil, surface
water or groundwater) at, in, by, from or related to any property
owned, operated or leased by National or any of the Subsidiaries or
any activities or operations thereof; (ii) the transportation,
storage, treatment or disposal of Hazardous Materials in connection
with any property owned, operated or leased by National or any of the
Subsidiaries or any operations or facilities thereof; or (iii) the
violation, or alleged violation, of any Environmental Law of or from
any Governmental Body
<PAGE>
relating to environmental matters connected with any property owned,
operated or leased by National or any of the Subsidiaries.
"Environmental Costs and Liabilities" means any and all
-----------------------------------
losses, liabilities, obligations, damages, fines, penalties,
judgments, actions, claims, costs and expenses (including, without
limitation, fees, disbursements and expenses of legal counsel,
experts, engineers and consultants and the costs of investigation and
feasibility studies and Remedial Action) arising from or under any
Environmental Law or order or contract with any Governmental Body or
any other Person.
"Environmental Law" means any foreign, federal, state,
-----------------
provincial or local law, statute, regulation, code, ordinance, rule of
common law or other requirement in any way relating to the protection
of human health and safety or the environment as now or hereafter in
effect including, without limitation, the Canadian Environmental
Protection Act and the Environmental Assessment Act (British
Columbia), as such laws have been amended or supplemented, and the
regulations promulgated pursuant thereto, and all analogous foreign,
federal, state, provincial or local laws.
"Environmental Permits" shall have the meaning ascribed to
---------------------
such term in Section 4.20(a).
"Excise Tax Act" means the Excise Tax Act, R.S.C., 1985,
--------------
C.E-15, together with the regulations promulgated thereunder, as
amended or supplemented from time to time.
"Excluded Assets" shall have the meaning ascribed to such
---------------
term in Section 1.3 hereof.
"Excluded Liabilities" means any and all liabilities or
--------------------
obligations of National or any of its Subsidiaries of any kind, nature
and description, absolute or contingent, known or unknown, existing on
or prior to the Closing Date or thereafter coming into being or
arising by reason of any state of facts existing, or any transaction
entered into, on or prior to the Closing Date (including, without
limitation, any such liabilities arising under any Environmental Laws
and any such liabilities relating to Taxes), other than the Contract
Liabilities and Credited Liabilities referred to in Section 1.4
hereof. The definition of Excluded Liability shall include, without
limitation, (i) any liability arising in connection with any Pay Day
Loan made prior to Closing and, (ii) those liabilities disclosed on
Schedule 4.9.
<PAGE>
"Expenses" shall have the meaning ascribed to such term in
--------
Section 1.4(b) hereof.
"Financial Statements" shall have the meaning ascribed to
--------------------
such term in Section 4.8 hereof.
"GAAP" means Canadian generally accepted accounting
----
principles as of the date hereof.
"Gent Isle" has the meaning specified in Schedule 4.4(b).
---------
"Governmental Body" means any government or governmental or
-----------------
regulatory body thereof, or political subdivision thereof, whether
federal, state, provincial, local or foreign, minister, governor or
lieutenant governor-in-council, board, tribunal or any agency,
instrumentality or authority thereof, or any court or arbitrator
(public or private).
"GST" shall refer to the Goods and Services Tax levied under
---
Part IX of the Excise Tax Act.
"Hazardous Material" means any substance, material or waste
------------------
which is regulated by Canada, or any state, provincial or local
Governmental Body including, without limitation, petroleum and its by-
products, asbestos, and any material or substance which is defined as
a "hazardous waste," "hazardous substance," "hazardous material,"
"restricted hazardous waste," "industrial waste," "solid waste,"
"contaminant," "pollutant," "toxic waste" or "toxic substance" under
any provision of Environmental Law.
"Indemnitor" shall have the meaning ascribed to such term in
----------
Section 9.4(a) hereof.
"Law" means any federal, state, provincial, local or foreign
---
law (including common law), statute, code, ordinance, rule, regulation
or other requirement.
"Legal Proceeding" means any judicial, administrative or
----------------
arbitral actions, suits, proceedings (public or private), claims or
governmental proceedings.
"Licenses" shall have the meaning ascribed to such term in
--------
Section 1.2(a) hereof.
"Lien" means any lien, pledge, mortgage, hypothec, deed of
----
trust, security interest, claim, prior claim, lease, charge, option,
right of first refusal, easement, servitude, transfer
<PAGE>
restriction under any shareholder or similar agreement, encumbrance or
any other restriction or limitation whatsoever.
"Losses" means any and all losses, liabilities (accrued,
------
absolute, contingent or otherwise), suits, proceedings, judgments,
awards, demands, settlements, fines, assessments, damages, interest
and penalties, and costs and expenses (including without limitation
reasonable attorneys' fees and litigation expenses).
"Material Adverse Change" means any material adverse change
-----------------------
in the business, properties, results of operations, prospects or
condition (financial or otherwise) of National and the Subsidiaries
taken as a whole.
"Material Contracts" shall have the meaning ascribed to such
------------------
term in Section 4.15 hereof.
"MEI Interest" means the sum of the amount of Minority
------------
Interests for Calgary and Gent Isle, as of the close of business on
the Closing Date.
"Minimum Lease Condition" shall have the meaning ascribed to
-----------------------
such term in Section 10.15 hereof.
"Minority Equity Interests" shall have the meaning ascribed
-------------------------
to such term in Section 4.4 hereof.
"Minority Interests" means the amounts in respect to Calgary
------------------
and Gent Isle, calculated in the same manner as reported in National's
consolidated audited statement for its fiscal year ended December 31,
1995 under the heading "Investments and Minority Advances."
"National" shall have the meaning ascribed to such term in
--------
the introductory paragraph hereto.
"National Shares" shall have the meaning ascribed to such
---------------
term in the recitals hereof.
"Non-Assumable Claim" shall have the meaning ascribed to
-------------------
such term in Section 9.4(c) hereof.
"Non-Competition Agreement" shall have the meaning ascribed
-------------------------
to such term in Section 4.2 hereof.
"Non-Material Contract" means any Contract, other than Real
---------------------
Property Leases, and other than those Contracts that are or
<PAGE>
should be Material Contracts which was entered into in the ordinary
course of business consistent with past practice in an arm's length
transaction.
"Order" means any order, injunction, judgment, decree,
-----
ruling, writ, assessment or arbitration award.
"Other Shares" shall have the meaning ascribed to such term
------------
in the recitals hereof.
"Pay Day Loans" means (i) any arrangement under the "Pay
-------------
Day Advance Service" presently operated by National (including any
schedule or amendment thereto or assignment, assumption, renewal or
novation thereof) in existence as of the Closing and any agreements
which are evidenced in whole or in part, by a promissory note and a
post-dated check made payable to National or any Subsidiary, and (ii)
any restructuring, modification or extension of any Pay Day Loan of
the type described in or any Subsidiary clause (i) hereof.
"Permits" means any approvals, authorizations, consents,
-------
Licenses, permits or certificates.
"Permitted Exceptions" means (i) statutory liens for current
--------------------
taxes, assessments or other governmental charges not yet delinquent or
the amount or validity of which is being contested in good faith by
appropriate proceedings, provided an appropriate reserve is
established therefor; (ii) mechanics', carriers', workers', repairers'
and similar Liens arising or incurred in the ordinary course of
business that are not material to the business, operations and
financial condition of the property so encumbered or National and the
Subsidiaries; (iii) zoning, entitlement and other land use and
environmental regulations by any Governmental Body, provided that such
regulations have not been violated; and (iv) such other imperfections
in title, charges, easements, restrictions and encumbrances which do
not materially detract from the value of or materially interfere with
the present use of any Company Property subject thereto or affected
thereby.
"Person" means any individual, corporation, partnership,
------
firm, joint venture, association, joint-stock company, trust,
unincorporated organization, Governmental Body or other entity.
"Personal Property Lease" shall have the meaning ascribed to
-----------------------
such term in Section 4.13(a) hereof.
<PAGE>
"Post-Closing EBITDA" shall have the meaning ascribed to
-------------------
such term in Section 2.5 hereof.
"Pre-Closing EBITDA" shall have the meaning ascribed to such
------------------
term in Section 2.5 hereof.
"Prepaids" means, without duplication, the aggregate dollar
--------
amount of (i) National's prepaid assets, (ii) Reimbursable Security
Deposits and (iii) National's corporate tax refunds (to the extend not
subject to reduction or offset) for the taxable period from January 1,
1996 through the Closing Date, all, as determined in accordance with
GAAP, consistently applied, and the terms hereof, of National as of
the close of business on the Closing Date.
"Property Contracts" shall have the meaning ascribed to such
------------------
term in Section 4.12(a) hereof.
"Purchase Price" shall have the meaning ascribed to such
--------------
term in Section 2.1 hereof.
"Purchaser" shall have the meaning ascribed to such term in
---------
the introductory paragraph hereto.
"Purchaser Documents" shall have the meaning ascribed to
-------------------
such term in Section 5.2 hereof.
"Purchaser Indemnified Parties" shall have the meaning
-----------------------------
ascribed to such term in Section 9.2(a) hereof.
"Real Property Lease" shall have the meaning ascribed to
-------------------
such term in Section 4.12(a) hereof.
"Reimbursable Security Deposits" shall have the meaning
------------------------------
ascribed to such term in Section 1.4(b) hereof.
"Release" means any release, spill, emission, leaking,
-------
pumping, pouring, dumping, injection, deposit, disposal, discharge,
dispersal, leaching or migration into the indoor or outdoor
environment, or into or out of any property.
"Remedial Action" means all actions, including, without
---------------
limitation, any Capital Expenditures required, to (w) clean up,
remove, treat or in any other way address any Hazardous Material; (x)
prevent the Release or threat of Release of any Hazardous Material so
it does not endanger or threaten to endanger public health or welfare
or the indoor or outdoor environment; (y) perform pre-remedial studies
and investigations or post-remedial
<PAGE>
monitoring and care; or (z) bring any facility owned, operated or
leased by National of any of the Subsidiaries and the operations
thereon into compliance with Environmental Laws.
"Representatives" shall have the meaning ascribed to such
---------------
term in Section 6.6 hereof.
"Securities Act" shall have the meaning ascribed to such
--------------
term in Section 4.30 hereof.
"Seller Shares" shall have the meaning ascribed to such term
-------------
in the recitals hereof.
"Shareholder" shall have the meaning ascribed to such term
-----------
in the introductory paragraph hereto.
"Shareholders Agreement" means that certain shareholders
----------------------
agreement substantially in the form of Exhibit B hereto.
"Shareholder Loans" means all loans or other advances from
-----------------
the Shareholders, Tri-S and Betsyn Clark or any of their Affiliates
(other than National, any Subsidiary or any Minority Equity Interest)
to either National or any Subsidiary, including any accrued interest
thereon and any other unpaid obligations in respect thereto.
"Shareholder/National Documents" shall have the meaning
------------------------------
ascribed to such term in Section 4.2 hereof.
"Shareholder Indemnified Parties" shall have the meaning
-------------------------------
ascribed to such term in Section 9.2(d) hereof.
"Shareholder Releases" shall have the meaning ascribed to
--------------------
such term in Section 6.13 hereof.
"Shareholders' Representative" shall have the meaning
----------------------------
ascribed to such term in Section 10.13 hereof.
"Shares" shall have the meaning ascribed to such term in the
------
recitals hereto.
"Statement" shall have the meaning ascribed to such term in
---------
Section 6.15(b)(iii) hereof.
"Stores" shall have the meaning ascribed to such term in the
------
recitals hereto.
<PAGE>
"Subsidiary" means (i)any Person of which a majority of the
----------
outstanding voting or equity securities or other voting or equity
interests are owned, directly or indirectly by National, and (ii) any
partnership of which a general partnership or other interest
representing a majority interest in profits or capital is owned
directly or indirectly by National.
"Tax Act" shall refer to the Income Tax Act, R.S.C., 1985
-------
(5th Suppl.) c. 1, together with the regulations promulgated
thereunder, as amended or supplemented from time to time, including
any proposed amendment to such legislation announced by way of press
release from time to time by the Minister of Finance of Canada or
other Minister charged with the administration of the Tax Act, which
announcement confirms that such proposed amendment, when enacted,
shall have retroactive effect to a date prior to the date of its
enactment.
"Taxes" means all taxes, charges, fees, levies, imposts,
-----
duties, and other assessments, including but not limited to any
income, alternative minimum or add-on tax, estimated, gross income,
gross receipts, sales, use, transfer, gains, transactions,
intangibles, ad valorem, value-added, franchise, registration, title,
license, capital, paid-up capital, profits, withholding, payroll,
employment, excise, severance, stamp, occupation, premium, recording,
real property, personal property, highway use, commercial rent,
environmental, windfall profit tax, custom, duty or other tax,
governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest, penalties, or additions to
tax, and any interest or penalties imposed with respect to the filing,
obligation to file or failure to file any Tax Return.
"Tax Return" means any return, declaration, report, claim
----------
for refund, information return, statement, or other similar document
relating to Taxes, including any schedule or attachment thereto, and
including any amendment thereof.
"Tri-S" shall have the meaning ascribed to such term in the
-----
introductory paragraph hereto.
"Tri-S Common Shares" has the meaning ascribed to such term
-------------------
in Section 12.3 hereof.
"Tri-S Documents" shall have the meaning ascribed to such
---------------
term in Section 12.2 hereof.
"Tri-S Financial Statements" shall have the meaning ascribed
--------------------------
to such term in Section 12.8 hereof.
<PAGE>
"Tri-S Non-Competition Agreements" shall have the meaning
--------------------------------
ascribed to such term in Section 12.2 hereof.
"Tri-S Shareholders" shall have the meaning ascribed to such
------------------
term in the introductory paragraph hereto.
"Tri-S Shares" shall have the meaning ascribed to such term
------------
in the recitals hereof.
10.2 Payment of Sales, Use or Similar Taxes. All sales,
--------------------------------------
use, transfer, intangible, recordation, documentary stamp or similar
Taxes or charges, of any nature whatsoever, applicable to, or
resulting from, the transactions contemplated by this Agreement shall
be borne by the Shareholders and Mrs. Clark.
10.3 Expenses. Except as otherwise provided in this
--------
Agreement, the Shareholders, Mrs. Clark and the Purchaser shall each
bear their own expenses incurred in connection with the negotiation
and execution of this Agreement and each other agreement, document and
instrument contemplated by this Agreement and the consummation of the
transactions contemplated hereby and thereby, it being agreed that
National and any of the Subsidiaries may bear any of such costs and
expenses solely out of cash that is an Excluded Asset.
10.4 Specific Performance. (a) The Shareholders and the
--------------------
Tri-S Shareholders acknowledge and agree that the breach of this
Agreement would cause irreparable damage to the Purchaser and that the
Purchaser will not have an adequate remedy at law. Therefore, the
obligations of the Shareholders and the Tri-S Shareholders under this
Agreement, including, without limitation, the Shareholders' and the
Tri-S Shareholders' obligation to sell the Shares to the Purchaser,
shall be enforceable by a decree of specific performance issued by any
court of competent jurisdiction, and appropriate injunctive relief may
be applied for and granted in connection therewith. Such remedies
shall, however, be cumulative and not exclusive and shall be in
addition to any other remedies which any party may have under this
Agreement or otherwise.
(b) DFG acknowledges and agrees that the breach of Section
2.2(b) of this Agreement would cause irreparable damage to the
Shareholders and that the Shareholders will not have an adequate
remedy at law. Therefore, the obligations of DFG under Section 2.2(b)
of this Agreement shall be enforceable by a decree of specific
performance issued by any court of competent jurisdiction, and
appropriate injunctive relief may be applied for and granted in
connection therewith. Such remedies shall,
<PAGE>
however, be cumulative and not exclusive and shall be in addition to
any other remedies which any party may have under this Agreement or
otherwise.
10.5 Further Assurances. Each of the Shareholders, the
------------------
Tri-S Shareholders and the Purchaser agrees to execute and deliver
such other documents or agreements and to take such other action as
may be reasonably necessary or desirable for the implementation of
this Agreement and the consummation of the transactions contemplated
hereby.
10.6 Submission to Jurisdiction; Consent to Service of
-------------------------------------------------
Process.
-------
(a) The parties hereto hereby irrevocably submit to the
non-exclusive jurisdiction of any federal or state court located
within the State of New York over any dispute arising out of or
relating to this Agreement or any of the transactions contemplated
hereby and each party hereby irrevocably agrees that all claims in
respect of such dispute or any suit, action proceeding related thereto
may be heard and determined in such courts. The parties hereby
irrevocably waive, to the fullest extent permitted by applicable law,
any objection which they may now or hereafter have to the laying of
venue of any such dispute brought in such court or any defense of
inconvenient forum for the maintenance of such dispute. Each of the
parties hereto agrees that a judgment in any such dispute may be
enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law.
(b) Each of the parties hereto hereby consents to process
being served by any party to this Agreement in any suit, action or
proceeding by the mailing of a copy thereof in accordance with the
provisions of Section 10.10.
10.7 Entire Agreement; Amendments and Waivers
----------------------------------------
Confidentiality. This Agreement (including the schedules and exhibits
---------------
hereto) represents the entire understanding and agreement between the
parties hereto with respect to the subject matter hereof and can be
amended, supplemented or changed, and any provision hereof can be
waived, only by written instrument making specific reference to this
Agreement signed by the party against whom enforcement of any such
amendment, supplement, modification or waiver is sought. No action
taken pursuant to this Agreement, including without limitation, any
investigation by or on behalf of any party, shall be deemed to
constitute a waiver by the party taking such action of compliance with
any representation, warranty, covenant or agreement contained herein.
<PAGE>
The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a further or continuing
waiver of such breach or as a waiver of any other or subsequent
breach. No failure on the part of any party to exercise, and no delay
in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of such
right, power or remedy by such party preclude any other or further
exercise thereof or the exercise of any other right, power or remedy.
All remedies hereunder are cumulative and are not exclusive of any
other remedies provided by law. The parties acknowledge that they
each participated in drafting this Agreement, and there shall be no
presumption against any party on the ground that such party was
responsible for preparing this Agreement or any part thereof.
10.8 Governing Law. This Agreement shall be governed by
-------------
and construed in accordance with the laws of the State of New York
without giving effect to principles of conflicts of law.
10.9 Table of Contents and Headings. The table of contents
------------------------------
and section headings of this Agreement are for reference purposes only
and are to be given no effect in the construction or interpretation of
this Agreement.
10.10 Notices. All notices and other communications under
-------
this Agreement shall be in writing and shall be deemed given when
delivered personally or mailed by certified mail, return receipt
requested, to the parties (and shall also be transmitted by facsimile
to the Persons receiving copies thereof) at the following addresses
(or to such other address as a party may have specified by notice
given to the other party pursuant to this provision):
If to Purchaser or, after the Closing, National or Tri-S:
c/o Dollar Financial Group, Inc.
Daylesford Plaza, Suite 210
1436 Lancaster Avenue
Berwyn, Pennsylvania 19312
Attention: Donald F. Gayhardt, Vice President -
Corporate Development
Telephone No.: (610) 296-3400
Telecopy No.: (610) 296-7844
<PAGE>
with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: William M. Gutowitz, Esq.
Telephone No.: (212) 310-8000
Telecopy No.: (212) 310-8007
If to any Shareholder, Mrs. Clark or, prior to the Closing,
National or Tri-S:
National Money Mart Inc.
1640 Oak Bay Avenue, Third Floor
Victoria, British Columbia
Canada, V8R 1L2
Attention: Stephen A. Clark
Telephone: (604) 595-5211
Telecopy: (604) 595-0410
with a copy to:
Bishop & McKenzie
2500 10104-103 Avenue
Edmonton, Alberta
Canada, T5J 1V3
Attention: Norman J.K Bishop
Telephone: (403) 426-5500
Telecopy: (403) 426-1503
Any party may by notice change the address to which notice
or other communications to it are to be delivered or mailed.
10.11 Severability. If any provision of this Agreement is
------------
invalid or unenforceable, the balance of this Agreement shall remain
in effect.
10.12 Binding Effect; Assignment. This Agreement shall be
--------------------------
binding upon and inure to the benefit of the parties and their
respective successors and permitted assigns. Nothing in this
Agreement shall create or be deemed to create any third party
beneficiary rights in any person or entity not a party to this
Agreement except as provided below. No assignment of this Agreement
or of any rights or obligations hereunder may be made by any party
hereto without the prior written consent of the other parties hereto
and any attempted assignment without the required consents shall be
void; provided, however, that (i) the
-------- -------
<PAGE>
Purchaser may assign this Agreement and any or all rights hereunder
(including, without limitation, the Purchaser's rights to purchase the
Seller Shares and the Tri-S Shares and the Purchaser's rights to seek
indemnification hereunder) to (x) any Affiliate of the Purchaser
(provided that the Purchaser shall remain liable for all of its
obligations under this Agreement) or (y) after the Closing, to any
purchaser or transferee of any of the stock or assets of National, any
of the Subsidiaries (ii) Stephen A. Clark may assign his rights under
this Agreement to a newly formed corporation (provided that Stephen A.
Clark shall remain liable for all of his obligations under this
Agreement and such newly formed corporation may not have any
liabilities or obligations other than liabilities and obligations
arising under this Agreement). Upon any such permitted assignment,
the references in this Agreement to the Purchaser shall also apply to
any such assignee unless the context otherwise requires.
10.13 Shareholders' Representative. Stephen A. Clark
----------------------------
("Clark") is hereby designated and authorized by each of Mark
McDonald, Betsyn Clark and 698815 Alberta Ltd. as their representative
(the "Shareholders' Representative") to act for and represent the
Shareholders and Mrs. Clark with respect to all matters arising out of
Article IX hereof and in those other matters with respect to which
this Agreement specifies that the Shareholders' Representative shall
or may act, as well as matters which require or permit notice to be
given to any of the Shareholders or Mrs. Clark under this Agreement.
10.14 Western Union Bonus. The Parties recognize and agree
-------------------
that the payment of Five Hundred and Thirty Two Thousand
(C$532,000.00) Dollars (the "Western Union Bonus") received by
National from Western Union Financial Services (Canada) Inc. ("Western
Union") pursuant to that certain agreement dated January 1, 1996 is
contingent in nature and dependent upon the performance by National of
its obligations thereunder and that should such agreement be
terminated as a result of a default by National thereunder, then
National would be obliged to return to Western Union that portion of
the Western Union Bonus that is in proportion to the unexpired balance
of the term thereunder. Accordingly, the Parties agree that the
portion of the Western Union Bonus that is unearned as of the Closing
Date shall, for the purposes of the Closing Date Financial Statements
and the calculation of the Purchase Price (i) be recorded as an
Accounts Payable and (ii) the Taxes payable thereon shall not be
recorded as an Accounts Payable. For greater certainty and
notwithstanding anything to the contrary herein contained, any Taxes
payable on that portion of the Western Union Bonus that is
<PAGE>
unearned as at the Closing Date shall be for the sole account of
National and the Shareholders shall have no liability in respect
thereto.
10.15 Counterparts. This Agreement may be executed by the
------------
parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts
shall together constitute one and the same instrument. Each
counterpart may consist of a number of copies hereof each signed by
less than all, but together signed by all of the parties hereto.
ARTICLE XI
REPRESENTATIONS AND WARRANTIES OF DFG
DFG hereby represents and warrants to the Shareholders that:
11.1 Organization and Good Standing. DFG is a corporation
------------------------------
duly organized, validly existing and in good standing under the laws
of the State of Delaware.
11.2 Authorization of Agreement. DFG has all requisite
--------------------------
power and authority to execute and deliver this Agreement, and each
other agreement, document, instrument or certificate contemplated by
this Agreement to be executed by it in connection with
the consummation of the transactions contemplated by this Agreement
(together with this Agreement, the "DFG Documents"), and to consummate
the transactions contemplated hereby and thereby. This Agreement has
been, and each of the Documents will be at or prior to the Closing,
duly and validly executed and delivered by DFG and (assuming the due
authorization, execution and delivery by each Shareholder, Tri-S
Shareholder and National if a party thereto) this Agreement
constitutes, and each of the DFG Documents when so executed and
delivered will constitute, the legal, valid and binding obligations of
DFG, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally, and
subject, as to enforceability, to general principles of equity,
including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding
at law or in equity).
<PAGE>
11.3 Capitalization.
--------------
(a) The authorized DFG Common Stock consists solely of
50,000 shares of common stock, $0.001 par value per share. There are
30,054.51 shares of DFG Common Stock issued and outstanding.
(b) Except as set forth on Schedule 11.3, there is no
existing option, warrant, call, right, commitment or other agreement
of any character to which DFG is a party requiring (or which may in
the future require), and there are no securities of DFG outstanding
which upon conversion or exchange would (or may in the future)
require, the issuance, sale or transfer of any shares of capital stock
or other securities of DFG or other securities convertible into,
exchangeable for or evidencing the right to subscribe for or purchase
shares of capital stock or other securities of DFG. Except as set
forth on Schedule 11.3, DFG is not a party to any voting trust or
other voting agreement with respect to any of the shares of DFG Common
Stock or to any agreement relating to the issuance, sale, redemption,
transfer or other disposition of the DFG Common Stock.
11.4 Corporate Records.
-----------------
(a) DFG has delivered to the Shareholders true, correct
and complete copies of the certificate of incorporation (certified by
the Secretary of State or and by-laws (certified by the secretary,
assistant secretary or other appropriate officer) of DFG.
(b) The minute books of DFG contain complete and accurate
records of all meetings and accurately reflect all other corporate
action of the stockholders and boards of directors (including
committees thereof) of DFG. The stock certificate books and stock
transfer ledgers of DFG are true, correct and complete. All stock
transfer taxes levied or payable with respect to all transfers of
shares of DFG prior to the date hereof have been paid and appropriate
transfer tax stamps affixed.
11.5 Conflicts; Consents of Third Parties. Except as set
------------------------------------
forth on Schedule 11.5, (a) none of the execution and delivery by DFG
of this Agreement and the Shareholder/National Documents, the consum-
mation by DFG of the transactions contemplated hereby and thereby, or
compliance by with any of the provisions hereof or thereof will (i)
conflict with, or result in the breach of, any provision of the
certificate of incorporation, by-laws, or other organizational
documents of DFG; (ii) conflict
<PAGE>
with, violate, result in the breach or termination of, constitute a
default under, or give rise to any right of acceleration under, any
note, bond, mortgage, deed of trust, indenture, license, lease,
agreement or other instrument or obligation to which DFG is a party or
by which it or any of DFG assets is bound; (iii) violate any statute,
rule, regulation, judgment or Order of any Governmental Body by which
DFG is bound; or (iv) result in the creation of any Lien upon the
shares of DFG Common Stock being paid pursuant to Article II hereof or
the properties or assets of DFG.
(b) No consent, waiver, approval, Order, Permit or
authorization of, or declaration or filing with, or notification to,
any Person or Governmental Body is required on the part of DFG in
connection with the execution and delivery of this Agreement or the
Shareholder/National Documents, or the compliance by DFG, with any of
the provisions hereof or thereof.
11.6 Financial Statements. DFG has delivered to the
--------------------
Shareholders copies of (i) the audited consolidated balance sheets of
DFG and its subsidiaries as at June 30, 1996 and the related audited
consolidated statements of income and of cash flows of DFG and its
subsidiaries for the years then ended and (ii) the unaudited
consolidated balance sheet of DFG and its subsidiaries as at September
30, 1996 and the related consolidated statements of income and cash
flows of DFG and its subsidiaries for the period then ended (such
audited and unaudited statements, including the related notes and
schedules thereto, are referred to herein as the "DFG Financial
Statements"). Each of the DFG Financial Statements is complete and
correct in all material respects, has been prepared in accordance with
United States generally accepted accounting principals (subject to
normal year-end adjustments in the case of the unaudited statements)
and in conformity with the practices consistently applied by DFG
without modification of the accounting principles used in the
preparation thereof, and presents fairly in accordance with United
States generally accepted accounting principles the consolidated
financial position, results of operations and cash flows of DFG and
its subsidiaries as at the dates and for the periods indicated.
For the purposes of this Article (xi), the audited consoli-
dated balance sheet of DFG and its subsidiaries as at June 30, 1996 is
collectively referred to as DFG's "Balance Sheet" and December 31,
1995 is referred to as the "Balance Sheet Date".
11.7 No Undisclosed Liabilities. There are no obligations
--------------------------
of DFG as of the Balance Sheet Date which were
<PAGE>
required to be disclosed on the Balance Sheet (or the accompanying
notes) that were not disclosed.
11.8 Absence of Certain Developments. Except as expressly
-------------------------------
required by this Agreement or as set forth on Schedule 11.8, since the
Balance Sheet Date:
(a) there has not been any material adverse change in DFG
nor has there occurred any event which is reasonably likely to result
in a material adverse change in DFG;
(b) there has not been any change by DFG in accounting or
Tax reporting principles, methods or policies;
(c) DFG has not entered into any transaction or Contract
or conducted its business other than in the ordinary course consistent
with past practice;
(d) DFG has not failed to promptly pay and discharge
current liabilities except where disputed in good faith by appropriate
proceedings;
(e) DFG has not made any loans, advances or capital
contributions to, or investments in, any Person or paid any fees or
expenses to any shareholder or any Affiliate of any shareholder;
(f) DFG has not mortgaged, pledged or subjected to any
Lien any of its assets, or acquired any assets or sold, assigned,
transferred, conveyed, leased or otherwise disposed of any assets,
except for assets acquired or sold, assigned, transferred, conveyed,
leased or otherwise disposed of in the ordinary course of business
consistent with past practice.
11.9 Labor. There are no (i) strikes, work stoppages,
-----
slowdowns, lockouts or arbitrations or (ii) material grievances or
other labor disputes pending or, to the best knowledge of DFG,
threatened against or involving DFG. There are no unfair labor
practice charges, grievances or complaints pending or, to the best
knowledge of DFG, threatened by or on behalf of any employee or group
of employees of DFG.
11.10 Litigation. Except as set forth in Schedule 11.10,
----------
there is no suit, action, proceeding, investigation, claim or order
pending or, to the knowledge of DFG, overtly threatened against DFG
(or to the knowledge of DFG, pending or threatened, against any of the
officers, directors or key employees of DFG with respect to their
business activities on behalf of DFG), or
<PAGE>
to which any of the DFG is otherwise a party, before any court, or
before any governmental department, commission, board, agency, or
instrumentality that are reasonably likely to prohibit or restrain the
ability of DFG to enter into this Agreement or to consummate the
transactions contemplated hereby; nor, to the knowledge of DFG, is
there any reasonable basis for any such action, proceeding, or
investigation.
11.11 Compliance with Laws. DFG possesses all Licenses of
--------------------
and from all Governmental Bodies, and has made all filings with all
Governmental Bodies, necessary to own or lease its respective
properties and assets and to conduct the business(es) in which it is
engaged. Except as set forth on Schedule 11.11, no proceeding has
been threatened or commenced which seeks to, or could reasonably be
anticipated to, cause the suspension, modification, revocation or
withdrawal of any License. DFG is currently, and at all times has
been, in material compliance with all Laws applicable to it and/or the
businesses in which it is engaged including, without limitation, all
applicable credit, banking and consumer protection Laws. Laws
regulating check cashing, small loans or other loans, interest and
usury and debt collection, plain language Laws and Laws proscribing
unfair and/or deceptive acts or practices) and franchise disclosure
Laws. DFG has not offered, proposed, promised or made any illegal
payment to officers, employees or representatives of any Governmental
Body, or engaged in any illegal reciprocal practices or made any
illegal payment or given any other illegal consideration to any third
party.
11.12 No Bankruptcy. There has not been filed any petition
-------------
or application, or any proceeding commenced which has not been
discharged, by or against DFG with respect to any assets of any of
them under any law, domestic or foreign, relating to bankruptcy,
reorganization, fraudulent transfer, compromise, arrangements,
insolvency, readjustment of debt or creditors' rights, and no
assignment has been made by any of them for the benefit of their
respective creditors.
11.13 Taxes.
-----
(a) All Tax Returns required to be filed by or with
respect to DFG or its assets have been properly prepared and duly and
timely filed with the appropriate taxing authorities in all
jurisdictions in which such Tax Returns are required to be filed, and
all such Tax Returns are true, complete and correct in all material
respects. DFG has duly and timely paid all Taxes that are due, or
claimed or asserted by any taxing authority to be due, from or with
respect to it for periods covered by such Tax
<PAGE>
Returns. With respect to any period for which Tax Returns have not
yet been filed, or for which Taxes are not due or owing, DFG has made
sufficient current accruals for such Taxes in its financial statements
and Taxes for such period have or shall arise solely in the usual and
ordinary course of business. DFG has made all required estimated Tax
payments sufficient to avoid any underpayment penalties.
(b) DFG has duly and timely withheld from employee
salaries, wages and other compensation and has paid over to the
appropriate taxing authorities all amounts required to be so withheld
and paid over for all periods under all applicable laws.
(c) There are no liens with respect to Taxes upon any of
the assets of DFG.
(d) Neither DFG nor any of its directors, officers or
employees are aware, without inquiry, of any contingent Tax
liabilities or any grounds which would prompt a re-assessment,
including aggressive treatment of income and expenses in filing
earlier Tax returns.
(e) There are no actions, suits, proceedings,
investigations or claims now pending against DFG in respect to Taxes.
11.14 No Misrepresentation. No representation or warranty
--------------------
of DFG contained in this Agreement or in any schedule hereto or in any
certificate or other instrument furnished by DFG to the Shareholders
pursuant to the terms hereof, contains any untrue statement of a
material fact or omits to state a material fact necessary to make the
statements contained herein or therein not misleading.
ARTICLE XII
REPRESENTATIONS AND WARRANTIES OF THE TRI-S SHAREHOLDERS
Each of the Tri-S Shareholders hereby jointly and severally
represents and warrants to Purchaser as follows:
12.1 Organization and Good Standing. Tri-S is a
------------------------------
corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization as set forth
above and has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as now
conducted. Tri-S was formed on November 25, 1992
<PAGE>
as 547732 Alberta Ltd., which name was subsequently changed on June
20, 1994. Tri-S is duly qualified or authorized to do business and
is in good standing under the laws of each jurisdiction in which it
owns or leases real or immovable property and each other jurisdiction
in which the conduct of its business or the ownership of its
properties requires such qualification or authorization.
12.2 Authorization of Agreement. Each Tri-S Shareholder
--------------------------
has all requisite power, authority and legal capacity to execute and
deliver this Agreement, a Non-Competition Agreement substantially in
the form of Exhibit A hereto (the "Tri-S Non-Competition Agreement")
and each other agreement, document, instrument or certificate con-
templated by this Agreement to be executed by such Person in
connection with the consummation of the transactions contemplated by
this Agreement (together with this Agreement and the Tri-S Non-
Competition Agreement, the "Tri-S Documents"), and to consummate the
transactions contemplated hereby and thereby. This Agreement has
been, and each of the Tri-S Documents will be at or prior to the
Closing, duly and validly executed and delivered by each Tri-S
Shareholder and (assuming the due authorization, execution and
delivery by Purchaser if a party thereto) this Agreement constitutes,
and each of the Tri-S Documents when so executed and delivered will
constitute, the legal, valid and binding obligations of each Tri-S
Shareholder enforceable against such Person in accordance with their
respective terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally, and subject, as to enforceability, to
general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
12.3 Capitalization.
--------------
(a) The authorized capital stock of Tri-S consists solely
of an unlimited number of shares of common stock, without par value
(the "Tri-S Common Shares"). There are 100 shares of Tri-S Common
Shares issued and outstanding. The Tri-S Shares constitute all of the
issued and outstanding shares of Tri-S Common Shares and were duly
authorized for issuance and are validly issued, fully paid and non-
assessable and free of preemptive rights.
(b) There is no existing option, warrant, call, right,
commitment or other agreement of any character to which any
shareholder of Tri-S or Tri-S is a party requiring (or which
<PAGE>
may in the future require), and there are no securities of Tri-S
outstanding which upon conversion or exchange would (or may in the
future) require, the issuance, sale or transfer of any shares of
capital stock or other securities of Tri-S or other securities
convertible into, exchangeable for or evidencing the right to
subscribe for or purchase shares of capital stock or other securities
of Tri-S. None of the shareholders of Tri-S or Tri-S is a party to
any voting trust or other voting agreement with respect to any of the
shares of Tri-S Common Shares or to any agreement relating to the
issuance, sale, redemption, transfer or other disposition of the
capital shares of Tri-S.
12.4 Absence of Activity. Tri-S has never (i) owned or
-------------------
acquired, or agreed to acquire, any assets or property other than the
Other Shares, (ii) incurred or became subject to, or agreed to incur
or become subject to, any obligations or liabilities (whether
absolute, contingent or otherwise, known or unknown, and whether due
or to become due), (iii) conducted any business whatsoever, or (iv)
taken any corporate action of any nature whatsoever, including,
without limitation, entering into any agreement or arrangement,
amending its articles or certificate of incorporation or amalgamation
or other organizational documents, issuing any of its capital shares
or other securities (including any options, warrants or other rights
to receive securities), other than in connection with Tri-S's initial
organization or the authorization, execution and delivery of this
Agreement and the transactions contemplated hereby.
12.5 Corporate Records.
-----------------
(a) The Tri-S Shareholders have delivered to the Purchaser
true, correct and complete copies of the certificate of incorporation
(certified by the Registrar of Corporations or other appropriate
official of the applicable jurisdiction of organization) and articles
(certified by the secretary, assistant secretary or other appropriate
officer) or comparable organizational documents of Tri-S.
(b) The minute books of Tri-S have been previously made
available to the Purchaser and contain complete and accurate records
of all meetings and accurately reflect all other corporate action of
the stockholders and boards of directors (including committees
thereof) of Tri-S. The stock certificate books and stock transfer
ledgers of Tri-S have been previously made available to the Purchaser
and are true, correct and complete.
<PAGE>
12.6 Conflicts; Consents of Third Parties. Except as set
------------------------------------
forth on Schedule 12.6, (a) none of the execution and delivery by any
Tri-S Shareholder of this Agreement and the Tri-S Documents, the
consummation by each Tri-S Shareholder of the transactions
contemplated hereby and thereby, or compliance by either Tri-S
Shareholder with any of the provisions hereof or thereof will (i)
conflict with, or result in the breach of, any provision of the
certificate of incorporation, by-laws, shareholder agreement or other
organizational documents of any Tri-S Shareholder (or any of the
subsidiaries of Tri-S); (ii) conflict with, violate, result in the
breach or termination of, constitute a default under, or give rise to
any right of acceleration under, any note, bond, mortgage, deed of
trust, indenture, license, lease, agreement or other instrument or
obligation to which any Tri-S Shareholder (or any subsidiary of Tri-S)
is a party or by which any of them or any of their respective proper-
ties or assets is bound; (iii) violate any statute, rule, regulation,
judgment or Order of any Governmental Body by which any Tri-S
Shareholder (or any subsidiary of Tri-S) is bound; or (iv) result in
the creation of any Lien upon any of the Shares or the properties or
assets of National or any Subsidiary.
(b) No consent, waiver, approval, Order, Permit or
authorization of, or declaration or filing with, or notification to,
any Person or Governmental Body is required on the part of any Tri-S
Shareholder in connection with the execution and delivery of this
Agreement or the Tri-S Documents, or the compliance by each Tri-S
Shareholder, as the case may be, with any of the provisions hereof or
thereof.
12.7 Ownership and Transfer of Shares. Each Tri-S
--------------------------------
Shareholder is the record and beneficial owner of the Shares indicated
as being owned by it on Schedule 4.7, free and clear of any and all
Liens. Each Tri-S Shareholder has the power and authority to sell,
transfer, assign and deliver the Shares being transferred, assigned
and delivered by it pursuant to this Agreement as provided in this
Agreement, and such delivery will convey to the Purchaser good and
marketable title to such Shares, free and clear of any and all Liens.
Immediately after the Closing, Purchaser will own, directly or (in the
case of the Other Shares) indirectly through Tri-S, all the equity
interests in each of National and Tri-S.
12.8 Financial Statements. The Tri-S Shareholders have
--------------------
delivered to the Purchaser copies of (i) the unaudited balance sheets
of Tri-S as at December 31, 1993, 1994 and 1995 and the related
unaudited statements of income and of cash flows
<PAGE>
of Tri-S for the years then ended and (ii) the unaudited balance sheet
of Tri-S as at September 30, 1996 and the related statements of income
and cash flows of Tri-S for the period then ended (such unaudited
statements, including the related notes and schedules thereto, are
referred to herein as the "Tri-S Financial Statements"). Each of the
Tri-S Financial Statements is complete and correct in all material
respects, has been prepared in accordance with GAAP (subject to normal
year-end adjustments in the case of the unaudited statements) and in
conformity with the practices consistently applied by Tri-S without
modification of the accounting principles used in the preparation
thereof, and presents fairly in accordance with GAAP the consolidated
financial position, results of operations and cash flows of Tri-S as
at the dates and for the periods indicated.
For the purposes of this Article XII, the audited balance
sheet of Tri-S as at December 31, 1995 is collectively referred to as
Tri-S' "Balance Sheet" and December 31, 1995 is referred to as the
"Balance Sheet Date".
12.9 Taxes.
-----
(a) All Tax Returns required to be filed by or with
respect to Tri-S or its respective assets have been properly prepared
and duly and timely filed with the appropriate taxing authorities in
all jurisdictions in which such Tax Returns are required to be filed,
and all such Tax Returns are true, complete and correct in all
material respects. Tri-S has duly and timely paid or has had duly and
timely paid on its behalf all Taxes that are due, or claimed or
asserted by any taxing authority to be due, from or with respect to it
for periods covered by such Tax Returns. With respect to any period
for which Tax Returns have not yet been filed, or for which Taxes are
not due or owing, Tri-S has made or has caused to be made sufficient
current accruals for such Taxes in its financial statements and Taxes
for such period have or shall arise solely in the usual and ordinary
course of business. Tri-S has made or has caused to be made all
required estimated Tax payments sufficient to avoid any underpayment
penalties;
(b) No waivers of statutes of limitation or other
agreements or arrangements providing for an extension of time have
been given or requested with respect to Tri-S in connection with any
Tax Returns covering Tri-S with respect to any Taxes payable by it and
no power of attorney with respect to any Tax matter is currently in
force. The last period for which Taxes were assessed with respect to
the Federal Income Tax Returns of Tri-S was December 31, 1995. The
statutory period for the
<PAGE>
assessment of Taxes with respect to the federal income Tax Returns of
Tri-S for all prior periods has expired. Taxes have never been
assessed with respect to the provincial, local, and foreign Tax
Returns of Tri-S. No issue has been raised by any taxing authority in
any audit or examination of Tri-S, which, by application of the same
or similar principles, could reasonably be expected to result in a
deficiency for any subsequent period (including periods subsequent to
the Closing Date). There are no outstanding agreements, waivers, or
arrangements extending the statutory period of limitation applicable
to any claim for, or the period for the collection or assessment of,
Taxes due from or with respect to Tri-S for any taxable period;
(c) The Tri-S Shareholders have delivered or made
available to the Purchaser true and complete copies of each of (i) any
audit reports issued by any taxing authority within the last three
years relating to the federal, provincial, local or foreign Taxes due
from or with respect to Tri-S and (ii) all of the federal, provincial
local and foreign Tax Returns, for each of the last three years filed
by Tri-S;
(d) All deficiencies asserted or assessments made as a
result of any examinations by the Revenue Canada or any other taxing
authority of the Tax Returns of or covering or including Tri-S have
been fully paid, and there are no other audits or investigations by
any taxing authority in progress, nor has Tri-S received any notice
from any taxing authority that it intends to conduct such an audit or
investigation;
(e) Tri-S has paid no Taxes, and has filed a Federal Tax
Return in respect of the last two completed fiscal years. No claim
has been made by a taxing authority in a jurisdiction where Tri-S does
not file Tax Returns such that it is or may be subject to taxation by
that jurisdiction;
(f) There are no liens with respect to Taxes upon any of
the assets of Tri-S;
(g) There are no actions, suits, proceedings,
investigations or claims now threatened or pending against Tri-S in
respect of Taxes nor are there any matters under discussion with any
governmental authority with respect to Taxes asserted by any such
authority;
(h) Tri-S has no inventories;
(i) Tri-S has no depreciable assets;
<PAGE>
(j) The paid-up capital of Tri-S for income tax purposes
equals their respective paid up capital under corporate law;
(k) Except as set forth on Schedule 12.9, Tri-S has not,
within the last four completed fiscal years, made any election under
Section 85 of the Tax Act with respect to the acquisition or
disposition of any property;
(l) Tri-S has not, within the last four completed fiscal
years, made any election under Sub-section 83(2) of the Tax Act with
respect to payment out of a capital dividend account;
(m) Tri-S has not, within the last four completed fiscal
years, acquired or had the use of any property from a person with whom
it was not dealing at arm's length;
(n) Tri-S has not disposed of anything to a person with
whom it was not dealing at arm's length for proceeds less than the
fair market value thereof;
(o) Tri-S has not, since the Balance Sheet Date,
discontinued carrying on any business in respect of which any non-
capital losses were incurred;
(p) Tri-S has made all elections required to be made under
the Tax Act in connection with any distributions and all such
elections were true and correct and in prescribed form and were made
within the prescribed time periods;
(q) Since its date of incorporation, Tri-S has been a
"Canadian-controlled private corporation" within the meaning of the
Tax Act;
(r) Tri-S is not, nor has previously been at any time,
associated with any other Canadian-controlled private corporations
(within the meaning of the Tax Act), and Tri-S has not filed with the
Minister of National Revenue any agreement or form under Section
125(3) of the Tax Act and, except as disclosed on Schedule 12._ or
Schedule 12._, Tri-S is not carrying on and has never carried on
business as a member of any partnership;
(s) None of Tri-S nor its respective directors, officers
or employees are aware without inquiry of any contingent Tax
liabilities or any grounds which would prompt a re-assessment,
including aggressive treatment of income and expenses in filing
earlier Tax returns;
<PAGE>
(t) Control of Tri-S and the Subsidiaries has not been
acquired by a person or persons since its date of incorporation (for
purposes of this section, "control" is to be given the meaning found
in Sections 186, 251 and 256 of the Tax Act);
(u) To the Tri-S Shareholders' knowledge there are no
amounts outstanding and unpaid for which Tri-S has previously claimed
a deduction under the Tax Act;
(v) To the Tri-S Shareholders' knowledge, there are no
circumstances existing which could result in the application to Tri-S
of either Section 78 or Section 80, 80.01, 80.02, 80.3 or 80.04 of the
Tax Act;
(w) Tri-S has not claimed and will not claim any reserve
under any one or more of subparagraph 40(1)(a)(iii) or subparagraphs
20(1)(m) or 20(1)(n) of the Tax Act if any such amount could be
included in their income for a period ending after Closing;
(x) The financial statements and schedules attached to the
corporate income tax returns as filed by Tri-S for each of its
taxation years reflect and disclose all transactions to which each of
them was or is a party as required by the Tax Act and the regulations
made thereunder or other applicable revenue laws and all of the
transactions to which Tri-S was or is a party are reflected or
disclosed in these financial statements and schedules and these
statements and schedules have been duly and accurately completed as
required by these acts and regulations;
(y) Tri-S has not received a dividend out of tax paid
undistributed surplus or 1971 capital surplus on hand dividends within
the meaning of the Tax Act with respect to any assets it currently
holds;
(z) Tri-S has no net capital loss as of the Balance Sheet
Date and no transactions since that date will result in any net
capital loss;
(aa) Tri-S is not required to be registered under
subdivision (d) of Division V of Part IX of the Excise Tax Act with
respect to the GST;
(ab) Tri-S does not carry on business in any jurisdiction
and has not owed any Taxes imposed by the Retail Sales Tax (Ontario)
or the applicable legislation of any other province of Canada on the
acquisition of its tangible personal
<PAGE>
property and none of its tangible personal property or moveable
property has been transferred in a transaction contemplated under the
provisions of Section 20.7 of the Retail Sales Tax Act (Quebec) and
any regulations made thereunder or Section 18 of Regulation 904 to the
Retail Sales Tax Act (Ontario), or any predecessor thereof or the
analogous provisions of the sales tax legislation of any other
province;
(ac) Tri-S has not made or been a party to any election
under Sections 150(1), 156(1), 227(1) or 273(1) of the Excise Tax Act;
(ad) Dividends or other Distributions - Tri-S has not paid
--------------------------------
any dividends or deemed dividends which are subject to tax under Part
VI.1 of the Act;
(ae) Tri-S Shares Not Part of Distribution - The Tri-S
-------------------------------------
Shares were not acquired by Mrs. Clark as part of a distribution
(within the meaning of Subsection 55(1) of the Act) made in the course
of a reorganization in which a dividend was received to which
Subsection 55(2) would, but for paragraph 55(3)(b) of the Act apply;
(af) Other Shares Not Part of Distribution - The Other
-------------------------------------
Shares were not acquired by Tri-S as part of a distribution (within
---
the meaning of Subsection 55(1) of the Act) made in the course of a
reorganization in which a dividend was received to which Subsection
55(2) would, but for paragraph 55(3)(b) of the Act apply; and
(ag) The amount of the Dividend payable by National to Tri-
S does not exceed Tri-S' share of the income earned or realized by
National since the later of 1971 and the date that Tri-S first
acquired its stock in National and before the transaction or event or
the commencement of the series of transactions or events leading to
the transactions contemplated by the Agreement, the whole within the
meaning of Subsection 55(2) of the Act.
12.10 Litigation. There is no suit, action, proceeding,
----------
investigation, claim or order pending or, to the knowledge of any
Tri-S Shareholder, overtly threatened against Tri-S (or to the
knowledge of Tri-S, pending or threatened, against any of the officers
or directors of Tri-S with respect to their business activities on
behalf of Tri-S), or to which any of the Tri-S Shareholders is
otherwise a party, before any court, or before any governmental
department, commission, board, agency, or instrumentality; nor, to the
knowledge of any Tri-S Shareholder,
<PAGE>
is there any reasonable basis for any such action, proceeding, or
investigation. Tri-S is not subject to any judgment, Order or decree
of any court or Governmental Body and Tri-S is not engaged in any
legal action to recover monies due it or for damages sustained by it.
12.11 Compliance with Laws. Tri-S is currently, and at all
--------------------
times has been, in material compliance with all Laws applicable to
Tri-S and/or the businesses in which it has been engaged.
12.12 Related Party Transactions. Except as set forth on
--------------------------
Schedule 12.12, none of the Tri-S Shareholders or any of its
Affiliates has borrowed any monies from or has outstanding any
indebtedness or other similar obligations to National or any of its
Subsidiaries. Except as set forth in Schedule 12.12, none of the Tri-S
Shareholders or any Affiliate or any shareholder, officer, director or
employee of any of them (i) owns any direct or indirect interest of
any kind in, or controls or is a director, officer, employee or part-
ner of, or consultant to, or lender to or borrower from or has the
right to participate in the profits of, any Person which is (A) a com-
petitor, supplier, customer, landlord, tenant, creditor or debtor of
National or any of its Subsidiaries, (B) engaged in a business related
to the business of National or any of its Subsidiaries, or (C) a par-
ticipant in any transaction to which National or any of its
Subsidiaries is a party or (ii) is a party to any Contract or
transaction with National or any of its Subsidiaries.
12.13 Financial Advisors. No Person has acted, directly or
------------------
indirectly, as a broker, finder or financial advisor for any of the
Tri-S Shareholders in connection with the transactions contemplated by
this Agreement and no Person is entitled to any fee or commission or
like payment in respect thereof except as set forth on Schedule 4.26.
12.14 No Bankruptcy. There has not been filed any petition
-------------
or application, or any proceeding commenced which has not been
discharged, by or against either of the Tri-S Shareholders with
respect to any assets of any of them under any law, domestic or
foreign, relating to bankruptcy, reorganization, fraudulent transfer,
compromise, arrangements, insolvency, readjustment of debt or
creditors' rights, and no assignment has been made by any of them for
the benefit of their respective creditors.
12.15 No Misrepresentation. No representation or warranty
--------------------
of any Tri-S Shareholder contained in this Agreement or
<PAGE>
in any schedule hereto or in any certificate or other instrument
furnished by either Tri-S Shareholder to the Purchaser pursuant to the
terms hereof, contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statements
contained herein or therein not misleading.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first written above.
DOLLAR FINANCIAL CANADA LTD.
(formerly known as 705532 ALBERTA LTD.)
By: /s/ DONALD F. GAYHARDT
-------------------------------------
Name: DONALD F. GAYHARDT
Title: SECRETARY AND TREASURER
NATIONAL MONEY MART INC.
By: /s/ STEPHEN A. CLARK
-------------------------------------
Name: STEPHEN A. CLARK
Title: PRESIDENT
698815 ALBERTA LTD.
By: /s/ STEPHEN A. CLARK
-------------------------------------
Name: STEPHEN A. CLARK
Title: PRESIDENT
/s/ STEPHEN A. CLARK
----------------------------------------
STEPHEN A. CLARK
/s/ MARK MCDONALD
----------------------------------------
MARK MCDONALD
<PAGE>
TRI-S INVESTMENTS LTD.
By: /s/ BETSYN CLARK
-------------------------------------
Name: BETSYN CLARK
Title: PRESIDENT
/s/ BETSYN CLARK
----------------------------------------
BETSYN CLARK
DFG HOLDINGS, INC.
By: /s/ JEFFREY A. WEISS
-------------------------------------
Name: JEFFREY A. WEISS
Title: CHAIRMAN OF THE BOARD,
PRESIDENT AND CEO
DFG HOLDINGS, INC. HEREBY GUARANTIES PERFORMANCE BY THE
PURCHASER OF ITS OBLIGATIONS UNDER THIS AGREEMENT.
DFG HOLDINGS, INC.
By: /s/ JEFFREY A. WEISS
-------------------------------------
Name: JEFFREY A. WEISS
Title: CHAIRMAN OF THE BOARD,
PRESIDENT AND CEO
Exhibit 12.1
<PAGE>
<TABLE>
<CAPTION>
DOLLAR FINANCIAL GROUP, INC.
STATEMENT RE: COMPUTATION OF RATIO OF
EARNINGS TO FIXED CHARGES
Predecessor Company Successor Company
---------------------------------------- ----------------------------------
Six Months Pro Forma
Year Ended Ended Year Ended Three Months Three Months
December 31, June 30, June 30, September 30, September 30,
--------------------------- ---------- --------------- ------------- -------------
1991 1992 1993 1994 1995 1996 1995 1996 1996
---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Consolidated
pretax income
from continuing
operations $(3,041) $ (788) $ 1,257 $ 1,085 $1,582 $(3,282) $ 14 $ 298 $ 181
Interest expense 2,554 1,744 1,597 721 2,480 3,385 759 1,358 3,198
Net amortization
of debt discount
and premium and
issuance expense -- -- -- -- 137 137 -- 84 108
Interest portion
of rental expense 450 616 627 319 778 978 235 347 597
------ ------- ------- ------- ------ ------ ----- ------ --------
Earnings $ (37) $ 1,572 $ 3,481 $ 2,125 $4,977 $1,218 $1,008 $2,087 $ 4,084
====== ======= ======= ======= ====== ====== ====== ====== ========
Interest expense $ 2554 $ 1,744 $ 1,597 $ 721 $2,480 $3,385 $ 759 $1,358 $ 3,198
Net amortization
of debt discount
and premium and
issuance expense -- -- -- -- 137 137 -- 84 108
Interest portion
of rental expense 450 616 627 319 778 978 235 347 597
------- ------- ------- ------- ------ ------- ----- ------ --------
Fixed Charges $ 3,004 $ 2,360 $ 2,224 $ 1,040 $ 3,395 $ 4,500 $ 994 $1,789 $ 3,903
======= ======= ======= ======= ======= ======= ===== ====== ========
Ratio of Earnings
to Fixed Charges -- -- 1.6 2.0 $ 1.5 $ -- $1.0 $ 1.2 $ 1.1
======= ======= ===== ===== ====== ======= ==== ===== =======
Deficiency of
Earnings to
Fixed Charges
(in thousands) $(3,041) $ (788) $ -- $ -- $ -- $(3,282) $ -- $ -- $ --
======= ======= ======= ======= ====== ======= ===== ===== ========
</TABLE>
NYFS06...:\47\41847\0008\6678\TBLD186C.130
Exhibit 23.2
<PAGE>
Consent of Independent Auditors
We consent to the reference to our firm under the captions "Summary
Historical and Pro Forma Financial and Operating Data," "Selected
Historical Financial Data," and "Experts" and to the use of our
reports described below included in the Registration Statement (Form
S-4 No. 333-_________) and the related Prospectus of Dollar Financial
Group, Inc. dated December 19, 1996:
* Our report dated August 8, 1996 (except for the second
Paragraph of Note 14, as to which the date is August 28,
1996) with respect to the consolidated balance sheets of
Dollar Financial Group, Inc. and subsidiaries as of June 30,
1996 and 1995, and the related consolidated statements of
income, shareholder's equity, and cash flows for each of the
two years in the period ended June 30, 1996 and for the six
months ended June 30, 1994 and for the year ended December
31, 1993.
* Our report dated August 30, 1996 with respect to the
combined statements of income and of cash flows of L.M.S.
Development Corporation, Pacific Ring Enterprises, Inc., and
NCCI Corporation, collectively doing business as Chex$Cashed
for the year ended December 31, 1994.
* Our report dated November 8, 1996 with respect to the
balance sheets of Cash-N-Dash Check Cashing, Inc. as of
December 31, 1995 and 1994, and the related statements of
income, shareholders' equity, and cash flows for each of the
two years in the period ended December 31, 1995.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
December 17, 1996
Exhibit 23.3
<PAGE>
Consent of Independent Accountants
We hereby consent to the use in this Registration Statement of our
report, dated February 23, 1996, relating to the consolidated
financial statements of Any Kind Check Cashing Centers, Inc. and
consolidated partnership, and to the reference to our Firm under the
caption "Experts" in the Prospectus.
/s/ McGladrey & Pullen, LLP
Anaheim, California
December 18, 1996
Exhibit 23.4
<PAGE>
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts"
and to the use of our report dated March 6, 1996, in the Registration
Statement (Form S-4 No. 333- _________) and the related Prospectus of
Dollar Financial Group, Inc. dated December 19, 1996.
/s/ Ernst & Young
Victoria, Canada
December 17, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial
information extracted from the financial
statements contained in the body of the
accompanying Form S-4 and is qualified in its
entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<CIK> 0001028643
<NAME> DOLLAR FINANCIAL GROUP INC
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> JUN-30-1996
<CASH> 22,545
<SECURITIES> 0
<RECEIVABLES> 4,441
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 28,776
<PP&E> 5,271
<DEPRECIATION> 1,926
<TOTAL-ASSETS> 67,444
<CURRENT-LIABILITIES> 18,945
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 13,707
<TOTAL-LIABILITY-AND-EQUITY> 67,444
<SALES> 42,430
<TOTAL-REVENUES> 42,430
<CGS> 0
<TOTAL-COSTS> 42,327
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,385
<INCOME-PRETAX> (3,282)
<INCOME-TAX> (1,214)
<INCOME-CONTINUING> (2,068)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,068)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial
information extracted from the financial
statements contained in the body of the
accompanying Form S-4 and is qualified in its
entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<CIK> 0001028643
<NAME> DOLLAR FINANCIAL GROUP INC
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> SEP-30-1996
<CASH> 41,784
<SECURITIES> 0
<RECEIVABLES> 5,098
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 48,873
<PP&E> 6,950
<DEPRECIATION> 2,240
<TOTAL-ASSETS> 127,643
<CURRENT-LIABILITIES> 21,886
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 37,411
<TOTAL-LIABILITY-AND-EQUITY> 127,643
<SALES> 13,645
<TOTAL-REVENUES> 13,645
<CGS> 0
<TOTAL-COSTS> 11,989
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,358
<INCOME-PRETAX> 298
<INCOME-TAX> 246
<INCOME-CONTINUING> 52
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 52
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
