EXHIBIT 10.3
STRATEGIC ALLIANCE AGREEMENT
This Strategic Alliance Agreement (the "Agreement") is made and entered into as
of October 11, 2000 (the "Effective Date") by and between Pawnbroker.com, Inc.
("Pawnbroker.com"), a Delaware corporation with its principal office located at
85 Keystone, Suite A, Reno, Nevada, 89503, and First Cash Financial Services,
Inc. ("First Cash"), a Delaware corporation with its principal office located at
690 East Lamar, Suite 400, Arlington, Texas, 76011.
WHEREAS, Pawnbroker.com operates a web site located at URL:
http://www.pawnbroker.com (the "Pawnbroker.com Web Site"), which is designed to
offer merchandise from the inventories of its participating member pawnbrokers
("Members") and to facilitate transactions between such Members and buyers or
potential buyers ("Buyers") who visit the Pawnbroker.com Web Site;
WHEREAS, Pawnbroker.com has designed technology that permits Members offer
merchandise at negotiable prices using an automated negotiation system (the
"Negotiation System");
WHEREAS, First Cash is the United State's third largest publicly traded
pawnshop operator and currently owns and operates 114 pawn and check cashing
stores in Texas, Oklahoma, Washington, D.C., Maryland, Missouri, South Carolina,
Virginia and Mexico, and currently offers merchandise for sale on the Internet
at www.firstcash.com (the "First Cash Web Site"); and
WHEREAS, First Cash desires to offer merchandise from its inventories for
sale on the Pawnbroker Web Sites and Pawnbroker.com desires to offer such
merchandise for sale on its web sites in a cooperative marketing arrangement.
NOW, THEREFORE, in consideration of the mutual premises and covenants
hereinafter set forth, and intending to be legally bound, Pawnbroker.com and
First Cash hereby agree as follows:
SECTION 1--DEFINITIONS.
1.1 "Damages" means liabilities, damages, awards, settlements, losses, claims
and expenses, including reasonable attorney's fees and expenses and costs of
investigation.
1.2 "Intellectual Property Rights" means any patent, design right, copyright,
trademark, service mark, (and any applications or registration respecting the
foregoing), trade secret, know-how and/or other present or future intellectual
property right in any country of the world.
1.3 "Proprietary Information" means all business strategies, ideas, and
information provided by either party hereunder, and any non-public information
regarding the business of a party where such information is marked or otherwise
communicated as being "proprietary" or "confidential" or the like, or where such
information is, by its nature, confidential.
1.4 "First Cash Product" means those products of First Cash that will be
marketed and listed for sale on the Pawnbroker.com Web Site. First Cash Products
shall include all merchandise posted for sale on the First Cash Web Site under
the following categories: Antiques/Collectibles;
<PAGE>
Jewelry/Gemstones; Cameras/Optics; Coins/Bullion/Stamps; Electronics; CDs,
Videos, Games; Sporting Goods; Tools and Vehicles. First Cash Products shall not
include Weapons, Pornography, unlawful items or items that violate
Pawnbroker.com's standard merchandise listing policies, as interpreted by
Pawnbroker.com, in its sole discretion. The parties will mutually designate the
particular Pawnbroker Web Sites on which such products will be offered, marketed
and listed, from time to time during the term of this Agreement.
1.5 "First Cash's Promotional Content" means all text, information, data, images
(still and moving), sound recordings and all other materials, designs,
trademarks, trade names, copyrighted materials, references or other information
(including, without limitation pricing information) related to First Cash
Products, which is provided to Pawnbroker.com hereunder.
1.6 "Pawnbroker Web Sites" means the Pawnbroker.com Web Site and any other web
site in which Pawnbroker.com offers Member merchandise for sale or in which
Pawnbroker.com operates from time to time.
1.7 "Warrant" means a warrant issuable to First Cash pursuant to Section 4.4 of
this Agreement.
SECTION 2--RESPONSIBILITIES OF FIRST CASH
2.1 First Cash agrees that it will offer its entire First Cash Web Site
inventory of First Cash Products for sale on the Pawnbroker Web Sites during the
term of this Agreement, and shall designate the particular Pawnbroker Web Sites
on which such products will be marketed and listed, from time to time during the
term of this Agreement. All items of First Cash Products shall be offered for
sale on the Pawnbroker.com Web Site and/or the First Cash Web Site, the First
Cash retail stores, as well as, any additional Web Sites, which First Cash may
elect to use. All sales of First Cash products shall be filled on a first in
first out basis.
2.2 First Cash shall provide Pawnbroker.com with all necessary First Cash's
Promotional Content in a timely manner during the term of this Agreement, and
First Cash hereby grants Pawnbroker.com a non-exclusive, worldwide, royalty-free
license, with a right of sublicense, to use, copy, modify, display, publish and
distribute such First Cash Promotional Content for the marketing, promotion and
sale of the First Cash Products on or through the Pawnbroker Web Sites. Pursuant
to the foregoing license, Pawnbroker.com may modify First Cash's Promotional
Content so that it is customized to fit the style, layout, colors and general
appearance of the Pawnbroker Web Sites on which such content will be published.
2.3 First Cash agrees that it will offer First Cash Products through the
Pawnbroker Web Sites on pricing terms no less favorable than those offered to
its own customers of its First Cash Web Site. For each order for First Cash
Products processed through the Pawnbroker Web Sites, First Cash shall (i)
retrieve the order information such that such order is fulfilled and shipped to
the applicable customer within two (2) business days from notification by
Pawnbroker.com, provided that such First Cash Product has not been previously
sold; (ii) ship First Cash Products by using a shipping service with a reliable
tracking method; (iii) provide such products in a manner consistent with the way
in which such products were advertised or represented on the Pawnbroker Web
Sites; (iv) treat such customer fairly and in accordance with reasonable
2
<PAGE>
business practices; (v) provide all service, maintenance and other assistance
requested by customers in connection with First Cash Products; (vi) comply with
the refunds and exchange policy on the Pawnbroker.com Web sites, as such policy
may be modified from time to time during the term of this Agreement; and (vii)
comply with all applicable laws. In the event a First Cash Product has been
sold, First Cash will immediately notify Pawnbroker.com that such product has
been sold and that any order for such First Cash Product can not be processed.
SECTION 3--RESPONSIBILITIES OF PAWNBROKER.COM
3.1 Pawnbroker.com shall use commercially reasonable efforts to publish First
Cash's Promotional Content on locations mutually acceptable to the parties on
the Pawnbroker Web Sites in order to market First Cash Products for sale on such
web sites. Notwithstanding the foregoing, Pawnbroker.com does not warrant that
the use of any of the Pawnbroker Web Sites will be uninterrupted, error-free or
continuously available.
3.2 Pawnbroker.com shall use commercially reasonable efforts, with the
cooperation and assistance of First Cash technical personnel, to develop
electronic data capture technology to download for listing on the Pawnbroker Web
Sites the First Card Products posted on the First Cash Web Site.
3.3 For each order for First Cash Products processed through a Pawnbroker Web
Site, Pawnbroker.com shall (i) bill for and collect from customers any amounts
charged with respect to any of First Cash Product purchased by customers by or
through the Pawnbroker Web Site; (ii) make available to First Cash for retrieval
(via a Web site) the necessary order information, such as dollar amount of the
order, the items ordered, and the delivery information such as name, address,
phone number and email address of each purchaser; and (iii) maintain all
customer and other records pertaining to such persons. Except as expressly
provided in this Agreement, Pawnbroker.com shall have no obligations or
liability whatsoever with respect to the fulfillment and shipment of orders for
First Cash Products or related customer service in the fulfillment and shipment
of such orders. Pawnbroker.com will collect its standard charge for shipping,
handling and insurance from purchasers of First Cash Products and will pay such
amounts to First Cash. Originating First Cash pawnshops will be responsible for
shipping and handling, and Pawnbroker.com will not be liable to First Cash
and/or such originating pawnshops if actual shipping, handling and insurance
charges exceed the amount collected therefore.
3.4 Pawnbroker.com acknowledges that First Cash retains all right, title and
interest (including all Intellectual Property Rights) in and to First Cash's
Promotional Content, subject to the license granted to Pawnbroker.com under this
Agreement. Except as expressly provided herein, neither party is granted any
right or license to any software, materials, information, Intellectual Property
Rights or the like of the other party.
3.5 PAWNBROKER.COM HEREBY DISCLAIMS ALL WARRANTIES AND REPRESENTATIONS, EXPRESS
AND IMPLIED, AND ALL LIABILITY FOR DAMAGES OF ANY KIND RESULTING OR ARISING FROM
(A) THE PAWNBROKER WEB SITES, ITS USE OR CONTINUED AVAILABILITY, AND ANY
MATERIALS, INFORMATION OR PRODUCTS AVAILABLE OR ACCESSIBLE THEREFROM, AND (B)
ANY PARTICULAR LEVEL OF ORDERS RECEIVED OR SALES MADE OF FIRST CASH PRODUCTS
3
<PAGE>
THROUGH THE PAWNBROKER WEB SITES OR PAWNBROKER.COM'S MARKETING AND PROMOTIONAL
EFFORTS AS REQUIRED HEREUNDER.
3.6 Pawnbroker.com shall provide customer support services for transactions of
First Cash Products through the Pawnbroker Web Sites, with such reasonable
assistance as may be required from time to time by First Cash customer service
staff. Pawnbroker.com's customer service shall only communicate with First Cash
customer service staff and not with individual First Cash pawn stores.
3.7 Pawnbroker.com shall not offer employment or cause any of First Cash's
employees to leave First Cash for a period of five (5) years from the effective
date of this Agreement.
SECTION 4--PRICING, PAYMENT AND SECURITY
4.1 Before listing any First Cash Product or First Cash Promotional Content on
the Pawnbroker Web Sites, First Cash shall notify Pawnbroker.com as to the
minimum price for each item of First Cash Product (the "Minimum Price") for the
purposes of offering such First Cash Product for sale using Pawnbroker.com's
Negotiation System. The minimum price shall be lower than the listed retail
price for each item of First Cash Product published on the First Cash Web Site
and such Minimum Price shall not be disclosed on the Pawnbroker Web Sites.
4.2 First Cash and Pawnbroker.com agree that First Cash shall use reasonable
efforts to develop a system by which the Minimum Price for each First Cash
Product will be reduced each 90 days after such First Cash Product is initially
listed. The Minimum Price will be reduced using a formula developed by First
Cash for each category of merchandise listed on the Pawnbroker Web Sites. The
price reduction shall exclude jewelry.
4.3 Pawnbroker.com shall reimburse First Cash for the difference between the
Minimum Price and sales price if any First Cash Product is sold by
Pawnbroker.com for a price less than the Minimum Price, as adjusted.
4.4 Pawnbroker.com agrees to issue First Cash Warrants, vesting subject to
certain terms and conditions, exercisable to acquire a total of 1,500,000 shares
of Pawnbroker.com common stock as consideration for listing merchandise for sale
on the Pawnbroker Web Sites and for agreeing to sell First Cash Products at a
Minimum Price pursuant to Section 4.1 and to accept certain reductions in the
Minimum Price for First Cash Products pursuant to Section 4.2 of this Agreement.
(a) Pawnbroker.com shall issue to First Cash three warrants, Warrant A,
Warrant B and Warrant C, in the forms attached hereto as Exhibit A, Exhibit B
and Exhibit C, respectively (collectively, the "Warrants"), each warrant
exercisable to acquire 500,000 shares of Pawnbroker.com common stock at $2.00
per share, subject to certain adjustments. First Cash agrees that the Warrants
will contain the following terms:
(i) Warrant A shall be immediately exercisable to acquire 500,000
shares of Pawnbroker.com common stock at $2.00 per share, each warrant
exercisable to acquire 500,000 shares of Pawnbroker.com common stock
at $2.00 per share,
4
<PAGE>
subject to certain adjustments as set forth in Warrant A, and shall
terminate on October 11, 2005, five years from the date of issuance;
(ii) Warrant B shall vest and become exercisable on October 11, 2001,
to acquire 500,000 shares of Pawnbroker.com common stock at $2.00 per
share, each warrant exercisable to acquire 500,000 shares of
Pawnbroker.com common stock at $2.00 per share, subject to certain
adjustments as set forth in Warrant B, and shall terminate on October
11, 2006, five years from the vesting date; provided however that
Warrant B shall be null and void in the event this Agreement is
terminated for any reason on or before October 11, 2001; and
(iii) Warrant C shall vest and become exercisable on October 11, 2002,
to acquire 500,000 shares of Pawnbroker.com common stock at $2.00 per
share, each warrant exercisable to acquire 500,000 shares of
Pawnbroker.com common stock at $2.00 per share, subject to certain
adjustments as set forth in Warrant C, and shall terminate on October
11, 2007, five years from the vesting date; provided however that
Warrant C shall be null and void in the event this Agreement is
terminated for any reason on or before October 11, 2002.
(b) First Cash understands that Pawnbroker.com is relying on certain
agreements, representations and warrants by First Cash, in determining to offer
and issue the Warrants to First Cash in a manner exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
and applicable state securities laws.
(c) First Cash acknowledges and agrees that Pawnbroker.com has made no
representations to First Cash regarding the tax consequences of any
consideration received by or for its benefit pursuant to this Agreement. Each of
Pawnbroker.com and First Cash agrees to pay all their respective federal or
state taxes, if any, which are required by law to be paid with respect to
consideration paid or received under this Agreement.
(d) Pawnbroker.com has agreed to provide First Cash with certain
registration rights under the Securities Act as set forth in Exhibit D, attached
hereto (the "Registration Rights Agreement").
4.5 Purchasers of First Cash Products sold through Pawnbroker Web Sites may
return such product to the originating First Cash pawn shop for any reason
within ten days after receipt thereof. Such right to return First Cash Products
is in lieu of any other representation or warranty, express or implied, related
to First Cash Product sold through Pawnbroker Web Sites. For each return of a
First Cash Product, Pawnbroker.com may chargeback to First Cash the sale price
of such product, plus shipping and handling charges and state sales tax, less
Pawnbroker.com's commissions. Pawnbroker.com shall be responsible for all credit
card fees related to First Cash Product returns.
4.6 For each order for First Cash Products purchased through the Pawnbroker.com
Web site, Pawnbroker.com shall be entitled to retain 4% commission (% of sales
price), accept for specialty items (Watches Priced over $500.00, Loose Diamonds
and Gold Coins) which shall be entitled to retain a 1% commission (% of sales
price).
5
<PAGE>
4.7 Any and all federal and state sales, use and other taxes of any kind (other
than corporate income taxes payable by Pawnbroker.com) based on or due as a
result of any amounts paid to Pawnbroker.com hereunder or the sale of any of
First Cash Products shall be calculated and collected by Pawnbroker.com, paid to
First Cash by Pawnbroker.com and remitted by First Cash to the applicable
governmental agencies. Pawnbroker.com will be liable to First Cash for errors in
calculation and collection, and First Cash will be liable to Pawnbroker.com for
remittance to the applicable governmental agencies of the full amounts of such
items paid to First Cash by Pawnbroker.com.
4.8 First Cash shall provide to Pawnbroker.com monthly statements within thirty
(30) days following the end of a calendar month describing all orders for First
Cash Products that are received through the Pawnbroker.com Web site and
fulfilled by First Cash, and all applicable returns of First Cash Products
during that time period. Pawnbroker.com will provide to First Cash monthly
reports within thirty (30) days following the end of a calendar month describing
all orders for First Cash Products that are received through the Pawnbroker.com
Web site, the price charged for such merchandise, the amount collected by
Pawnbroker for each transaction, the applicable commission payable pursuant to
Section 4.6 of this Agreement, the applicable amount of sales tax collected in
the transaction and the amount of each credit to a customer related to each
return of First Cash Products. Each of First Cash and Pawnbroker.com shall
provide additional reports at the other party's reasonable request.
4.9 Upon commencement of sales of First Cash Products hereunder, Pawnbroker.com
shall provide First Cash with an irrevocable letter of credit on which First
Cash may draw against in the event of a default in the payment to First Cash by
Pawnbroker.com of an obligation hereunder, which is not subject to a bona fide
dispute between the parties. The letter of credit will be in an amount equal to
the greater of $20,000 or the highest one (1) week sales volume activity times
two (2). Bi-weekly thereafter, Pawnbroker.com will adjust, if needed, the letter
of credit to an amount equal to the greater of $20,000 or the highest one (1)
week sales volume activity times two (2). This irrevocable letter of credit
shall remain outstanding for as long as this Agreement is in effect.
4.10 Each Tuesday during the term of this Agreement, Pawnbroker.com will wire
transfer to First Cash the aggregate sales price of First Cash Products sold
through Pawnbroker.com since the preceding wire transfer, plus related taxes and
shipping charges less applicable commissions, less any chargebacks calculated
under Section 4.5 and the commissions under Section 4.6 of this Agreement.
SECTION 5--MARKETING
5.1 Within thirty (30) days of the date of this Agreement, First Cash shall
participate with Pawnbroker.com in the development and delivery of a press
release announcing the relationship between Pawnbroker.com and First Cash. The
press release shall be subject to the prior written approval of both
Pawnbroker.com and First Cash.
5.2 All information to be disseminated externally about the relationship between
First Cash and Pawnbroker.com and the products marketed hereunder shall be
reviewed and approved by both parties prior to any use or other publication.
6
<PAGE>
5.3 The parties acknowledge that their respective obligations under this
Agreement are non-exclusive, and that neither party is prohibited from entering
into any obligations or agreement that is similar or identical to such party's
obligations under this Agreement.
5.4 During the term of this Agreement, Pawnbroker.com reserves the right, in its
sole discretion, to remove any of First Cash's Promotional Content and/or
discontinue the listing of any of First Cash Products from the Pawnbroker.com
Web site.
SECTION 6--REPRESENTATIONS; WARRANTIES AND COVENANTS
6.1 First Cash Representations and Warranties. First Cash represents and
warrants to Pawnbroker.com that to the best of its knowledge:
(a) First Cash owns and has the right and authority to sell all of First
Cash Products listed for sale on the Pawnbroker Web Site, free and clear of all
liens, security interests and other encumbrances, unless previously sold to a
third-party while listed on the Pawnbroker.com Web Site;
(b) all descriptions and First Cash's Promotional Content provided by First
Cash to Pawnbroker.com are accurate, current and complete and are not
fraudulent, misleading or otherwise deceptive; First Cash Products and their
marketing and sale as contemplated hereunder does not violate the Intellectual
Property Rights of any third party;
(c) with respect to all of First Cash Products sold through a Pawnbroker
Web Site(s), First Cash will comply with the then-current return and exchange
policy published on such Pawnbroker Web Site(s); and
(d) the execution, delivery and performance by First Cash of this Agreement
does not and will not violate or conflict with any other agreements entered into
by First Cash.
6.2 Pawnbroker Representations; Warranties and Covenants. Pawnbroker.com hereby
represents and warrants to First Cash that to the best of its knowledge:
(a) Pawnbroker.com shall make no representations, warranties, or guarantees
regarding First Cash Products that are substantively inconsistent with First
Cash's Promotional Content or any other specifications, descriptions,
documentation or other warranties made by First Cash in connection with First
Cash Products.
(b) Pawnbroker.com has all requisite power and authority (corporate and
other), and has taken all necessary corporate action, to authorize, execute,
deliver and perform this Agreement, to execute, issue, sell and deliver the
Warrants and a certificate or certificates evidencing the Warrants, to authorize
and reserve for issue and, upon payment from time to time of the exercise price
of such Warrants, to issue, sell and deliver, the shares of the Common Stock
issuable upon exercise of the Warrants ("Shares"), and to perform all of its
obligations under this Agreement and the Warrants. The Shares, when issued in
accordance with the Warrants, will be duly authorized and validly issued and
outstanding, fully paid and nonassessable and free of all liens, claims,
encumbrances and preemptive rights. This Agreement and, when issued, each
Warrant issued pursuant hereto, has been or will be duly executed and delivered
by
7
<PAGE>
Pawnbroker.com and is or will be a legal, valid and binding agreement of
Pawnbroker.com, enforceable in accordance with its terms. No authorization,
approval, consent or other order of any governmental entity, regulatory
authority or other third party is required for such authorization, execution,
delivery, performance, issue or sale.
(c) The execution and delivery of this Agreement, the consummation of the
transactions herein contemplated and the compliance with the terms and
provisions of this Agreement and of the Warrants will not conflict with, or
result in a breach of, or constitute a default or an event permitting
acceleration under, any statute, the Certificate of Incorporation or Bylaws of
Pawnbroker.com or any indenture, mortgage, deed of trust, note, bank loan,
credit agreement, franchise, license, lease, permit, or any other agreement,
understanding, instrument, judgment, decree, order, statute, rule or regulation
to which Pawnbroker.com is a party or by which it is or may be bound.
(d) Pawnbroker.com agrees that during the term of this Agreement it will
use its best efforts to keep current in the filing of all forms and other
materials, if any, which it may be required to file with the appropriate
regulatory authority pursuant to the Securities Exchange Act of 1934, as amended
("Exchange Act"), and all other forms and reports required to be filed with any
regulatory authority having jurisdiction over Pawnbroker.com.
(e) Pawnbroker.com stipulates that the remedies at law of the holder of the
Warrants issued under Section 4.4(a), or any holder of Shares issued upon
exercise of such Warrant, in the event of any default or threatened default by
Pawnbroker.com in the performance of or compliance with any of the terms of this
Agreement, the Warrants or the Registration Rights Agreement are not and will
not be adequate and that such terms may be specifically enforced by a decree for
the specific performance of any agreement contained herein or in the Warrants or
by an injunction against a violation of any of the terms hereof or thereof or
otherwise.
SECTION 7--INDEMNIFICATION
7.1 First Cash agrees to indemnify and hold Pawnbroker.com and its affiliated
companies, and their respective officers, directors, employees, agents, assigns,
and representatives harmless from and against any and all Damages resulting from
or arising out of (i) the marketing, sale, distribution or use of the First Cash
Products, or any other activities of First Cash or its agents related to the
First Cash Products; (ii) third party claims related to any misrepresentation or
breach of representation or warranty of First Cash contained herein; or (iii)
any third party claim that the First Cash Products or First Cash's Promotional
Content infringe any Intellectual Property Rights.
7.2 Pawnbroker.com will indemnify and hold First Cash and its affiliated
companies, and their respective officers, directors, employees, agents, assigns
and representatives harmless from and against (i) any and all Damages resulting
from or arising out of any third party claims related to any misrepresentation
or breach of representation or warranty of Pawnbroker.com contained herein; (ii)
any other breach of this Agreement by Pawnbroker.com; or (iii) any other
third-party claim relating to any violation of federal or state securities law
by Pawnbroker.com.
8
<PAGE>
SECTION 8--TERM AND TERMINATION
8.1 This Agreement shall commence on the Effective Date and unless sooner
terminated as provided in this agreement, shall remain in full force and effect
for a term of twelve (12) months (the "Initial Term"). Thereafter, this
Agreement shall automatically renew for successive three (3) month terms
("Renewal Term") provided, however, that a party may terminate this Agreement on
the expiration of the Initial Term or any Renewal Term by delivering written
notice of termination to the other not less than sixty (60) days before the
expiration of such Initial or Renewal Term.
8.2 In addition to any other remedy available at law or in equity, either party
may terminate this Agreement immediately, in whole or in part, without further
obligation to the other party in the event of:
(a) any breach of this Agreement by the other party that is not remedied
within 30 days notice of such breach in writing; or
(b) the other party's making an assignment for the benefit of its
creditors, the filing of a voluntary or involuntary petition under any
bankruptcy or insolvency law, under the reorganization or arrangement provisions
of the United States Bankruptcy Code, or under the provisions of any law of like
import in connection with the other party, or the appointment of a trustee or
receiver for the other party or its property; or
(c) non-payment of the amounts owed to First Cash.
(d) failure to cause a registration statement to be filed with the
Securities and Exchange Commission to register for resale the common stock
underlying the Warrants issued pursuant to Section 4.4(a) under the Securities
Act and in accordance with the Registration Rights Agreement; and failure to
cause such registration statement to become effective on or before March 1, 2001
and/or failure to maintain the effectiveness of such registration in accordance
with the Registration Rights Agreement.
8.3 Upon termination or expiration of this Agreement, (i) Pawnbroker.com shall
immediately discontinue the publication of First Cash's Promotional Content on
the Pawnbroker.com Web site, and shall stop all active marketing and promotion
of First Cash Products, and (ii) First Cash shall continue process and fulfill
all customer orders for First Cash Products received prior to termination as
necessary. Sections 5, 6, 7, 9 and 10 of this Agreement shall survive any
termination hereof.
8.4 The parties acknowledge and agree that (a) the rights under Warrant B shall
terminate and be null and void upon termination of this Agreement for any reason
prior to October 11, 2001, the vesting date for Warrant B, and (b) the rights
under Warrant C shall terminate and be null and void upon termination of this
Agreement for any reason prior to October 11, 2002, the vesting date of Warrant
C. In the event a Warrant is terminated pursuant to this Section 8.4,
Pawnbroker.com shall have no further obligations to First Cash with respect to
such Warrants.
9
<PAGE>
SECTION 9--LIMITATIONS OF LIABILITY.
EXCEPT AS PROVIDED IN THIS SECTION 9, NEITHER PARTY SHALL BE LIABLE TO THE OTHER
FOR ANY SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES, INCLUDING
WITHOUT LIMITATION, LOSS OF REVENUES, LOSS OF PROFITS, OR COST OF PROCUREMENT OF
SUBSTITUTE TECHNOLOGY, EVEN IF THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES. THIS LIMITATION SHALL APPLY TO ANY CLAIM OR CAUSE OF ACTION
WHETHER IN CONTRACT OR TORT (INCLUDING NEGLIGENCE) STRICT LIABILITY, OR BREACH
OF WARRANTY, BUT SHALL NOT APPLY IF (I) A FIRST CASH'S PRODUCT IS DETERMINED TO
BE DEFECTIVE AND TO HAVE CAUSED BODILY INJURY OR DEATH, OR (II) IF SUCH DAMAGES
ARE THE RESULT OF THE OTHER PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. IN
NO EVENT SHALL PAWNBROKER.COM'S TOTAL AGGREGATE LIABILITY UNDER OR AS A RESULT
OF THIS AGREEMENT EXCEED THE AMOUNT OF FEES PAID BY FIRST CASH HEREUNDER. IN NO
EVENT SHALL FIRST CASH'S TOTAL AGGREGATE LIABILITY UNDER OR AS A RESULT OF THIS
AGREEMENT EXCEED THE POLICY LIMITS OF ITS THEN CURRENT INSURANCE POLICIES.
SECTION 10--PROPRIETARY INFORMATION AND CONFIDENTIALITY.
10.1 Each party shall protect and keep confidential any and all Proprietary
Information of the other party embodied in any information disclosed hereunder,
and shall not use, disclose or, except as permitted by Section 10.4, allow any
third party access to any such Proprietary Information, except to the extent
allowed in this Agreement. In furtherance and not in limitation of the
foregoing, each party agrees to maintain the strict confidentiality of
Proprietary Information delivered by the other party.
10.2 Each party shall use its best efforts to ensure that only employees and
third parties whose duties give them a need to know such Proprietary Information
of the other party shall have access thereto. All such persons and entities
shall be instructed to treat the same as proprietary and confidential and the
receiving party shall take such other measures to protect the confidentiality of
such Proprietary Information, as it deems reasonable under the circumstances.
Without limiting the generality of the foregoing, each party shall require any
third party to whom it discloses any Proprietary Information to sign a
confidentiality agreement, enforceable by the other party, whereby such third
party agrees to be bound by the confidentiality provisions set forth in Section
10.
10.3 If a party, or any of its employees, shall be under a legal obligation in
any administrative, governmental, or judicial circumstance involuntarily to
disclose any Proprietary Information of the other, it shall give the party that
owns such Proprietary Information (the "Disclosing Party") prompt notice thereof
so that the Disclosing Party may seek an appropriate protective order. If the
Disclosing Party is finally unsuccessful in obtaining such protective order, and
if the party receiving such Proprietary Information (the "Receiving Party") or
any such employee would, in the opinion of its counsel, be held in contempt or
suffer other censure or penalty for failure to
10
<PAGE>
disclose, disclosure pursuant to the order or decree of an administrative,
governmental or judicial authority with jurisdiction over such party may be made
by the Receiving Party or its employees without liability hereunder.
10.4 Notwithstanding the foregoing, neither party shall be liable to the other
with regard to any disclosure of Proprietary Information of the other party
which: (i) was known to the Receiving Party, without restriction, at the time of
disclosure, as shown by the files of the Receiving Party in existence at the
time of disclosure; (ii) is disclosed with the prior written approval of the
Disclosing Party; (iii) was independently developed by the Receiving Party,
without any use of the Proprietary Information and by employees or other agents
of (or independent contractors hired by) the Receiving Party who have not been
exposed to such Proprietary Information; or (iv) becomes known to the Receiving
Party, without restriction, from a source who obtained such information other
than through the breach of this Agreement by the Receiving Party and not
otherwise in violation of the Disclosing Party's rights.
10.5 The obligations of confidentiality and limitations of use, disclosure, and
access set forth herein shall survive the termination of this Agreement for a
period of three years from the date of such termination.
SECTION 11--GENERAL
11.1 This Agreement represents the entire agreement of the parties regarding the
subject matter hereof, and supercedes all prior oral or written collateral
representations, agreements, or understandings regarding the subject matter
hereof.
11.2 All notices, requests and other communications to any party hereunder will
be in writing (including facsimile transmission or similar writing) and will be
given to such party at its address or facsimile number set forth below or at
such other address or facsimile number as such party may hereafter specify for
such purposes. Each such notice, request or other communication will be
effective (i) if given by facsimile, when such facsimile is transmitted to the
facsimile number specified in this Section and confirmation of receipt is
obtained or (ii) if given by any other means, when received at the address
specified below.
11.3 Neither party shall be liable for any delay or failure to meet its
obligations pursuant to this Agreement due to natural circumstances beyond its
reasonable control, including, but not limited to war, riots, insurrection,
civil commotion, fire, flood, storm or inability to obtain necessary labor,
materials or manufacturing facilities as a direct result of such natural
disasters.
11.4 If any term or provision of this Agreement is found to be invalid or
unenforceable for any reason, it shall be adjusted rather than avoided, if
possible, so as best to accomplish the objective of the parties to the extent
possible. In any event, the remaining terms and provisions shall be deemed valid
and enforceable. It is expressly understood and agreed that each provision of
this Agreement providing for a limitation of liability disclaimer or limitation
of warranties, or exclusion of damages is intended by the parties to be
severable and independent of any other provisions and to be enforced as such.
11.5 This Agreement shall be binding on the parties and on their successors and
assigns. Except as expressly provided herein, First Cash shall not transfer,
assign or subcontract any right
11
<PAGE>
or obligation hereunder without the prior written consent of Pawnbroker.com,
which consent shall not be unreasonably withheld.
11.6 The failure of either party at any time to require performance by the other
party of any provision hereof shall not affect in any way the full right to
require such performance at any time thereafter; nor shall the waiver by either
party of a breach of any provision hereof be taken or held to be a waiver of the
provision itself.
11.7 Each party to this Agreement agrees to execute and deliver all documents
and to perform all further acts and to take any and all further steps that may
be reasonably necessary to carry out the provisions of this Agreement and the
transactions contemplated hereby.
11.8 This Agreement may be executed in counterparts, each of which shall be
deemed an original, but which together shall constitute a single instrument.
11.9 The parties are independent contractors, and neither party shall hold
itself out as an agent of the other. Except as expressly provided herein,
neither party shall have any authority to bind or obligate the other in any
manner.
IN WITNESS WHEREOF, the Parties hereto agree to the provisions set forth
above and have executed this Agreement as of the Effective Date.
Pawnbroker.com, Inc.: First Cash Financial Services, Inc.
Signed: Signed:
------------------------ ------------------------
Printed name: Printed name:
------------------ ---------------------
Title: Title:
------------------------ ------------------------
Date: Date:
------------------------ ------------------------
