-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NaFoyR0bBYWT6Ez6OtfTlSqENBGZ1ag3RUon5Gmj3mikl4DcTx9UEqoLmOx6NpVa M9Py0jkT6VnxvR6b3wPIbw== 0000950130-96-004842.txt : 19961220 0000950130-96-004842.hdr.sgml : 19961220 ACCESSION NUMBER: 0000950130-96-004842 CONFORMED SUBMISSION TYPE: S-4 PUBLIC DOCUMENT COUNT: 81 FILED AS OF DATE: 19961219 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DOLLAR FINANCIAL GROUP INC CENTRAL INDEX KEY: 0001028643 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-18221 FILM NUMBER: 96683101 BUSINESS ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 BUSINESS PHONE: 6102963400 MAIL ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALBUQUERQUE INVESTMENTS INC CENTRAL INDEX KEY: 0001028644 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-18221-01 FILM NUMBER: 96683102 BUSINESS ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 BUSINESS PHONE: 6102963400 MAIL ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANY KIND CHECK CASHING CENTERS INC CENTRAL INDEX KEY: 0001028645 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-18221-02 FILM NUMBER: 96683103 BUSINESS ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 BUSINESS PHONE: 6102963400 MAIL ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHECK MART OF LOUISIANA INC CENTRAL INDEX KEY: 0001028646 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-18221-03 FILM NUMBER: 96683104 BUSINESS ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 BUSINESS PHONE: 6102963400 MAIL ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHECK MART OF NEW JERSEY INC CENTRAL INDEX KEY: 0001028647 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-18221-04 FILM NUMBER: 96683105 BUSINESS ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 BUSINESS PHONE: 6102963400 MAIL ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHECK MART OF NEW MEXICO INC CENTRAL INDEX KEY: 0001028648 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-18221-05 FILM NUMBER: 96683106 BUSINESS ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 BUSINESS PHONE: 6102963400 MAIL ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHECK MART OF PENNSYLVANIA INC CENTRAL INDEX KEY: 0001028649 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-18221-06 FILM NUMBER: 96683107 BUSINESS ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 BUSINESS PHONE: 6102963400 MAIL ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHECK MART OF TEXAS INC CENTRAL INDEX KEY: 0001028650 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-18221-07 FILM NUMBER: 96683108 BUSINESS ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 BUSINESS PHONE: 6102963400 MAIL ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHECK MART OF UTAH INC CENTRAL INDEX KEY: 0001028651 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-18221-08 FILM NUMBER: 96683109 BUSINESS ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 BUSINESS PHONE: 6102963400 MAIL ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHECK MART OF WASHINGTON INC CENTRAL INDEX KEY: 0001028652 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-18221-09 FILM NUMBER: 96683110 BUSINESS ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 BUSINESS PHONE: 6102963400 MAIL ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHECK MART OF WASHINGTON DC INC CENTRAL INDEX KEY: 0001028653 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-18221-10 FILM NUMBER: 96683111 BUSINESS ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 BUSINESS PHONE: 6102963400 MAIL ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHECK MART OF WISCONSIN INC CENTRAL INDEX KEY: 0001028654 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-18221-11 FILM NUMBER: 96683112 BUSINESS ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 BUSINESS PHONE: 6102963400 MAIL ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DFG WAREHOUSING CO INC CENTRAL INDEX KEY: 0001028655 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-18221-12 FILM NUMBER: 96683113 BUSINESS ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 BUSINESS PHONE: 6102963400 MAIL ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DOLLAR FINANCIAL INSURANCE CORP CENTRAL INDEX KEY: 0001028656 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-18221-13 FILM NUMBER: 96683114 BUSINESS ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 BUSINESS PHONE: 6102963400 MAIL ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DOLLAR INSURANCE ADMINISTRATION CORP CENTRAL INDEX KEY: 0001028657 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-18221-14 FILM NUMBER: 96683115 BUSINESS ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 BUSINESS PHONE: 6102963400 MAIL ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FINANCIAL EXCHANGE CO OF MICHIGAN INC CENTRAL INDEX KEY: 0001028658 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-18221-15 FILM NUMBER: 96683116 BUSINESS ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 BUSINESS PHONE: 6102963400 MAIL ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FINANCIAL EXCHANGE CO OF OHIO INC CENTRAL INDEX KEY: 0001028659 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-18221-16 FILM NUMBER: 96683117 BUSINESS ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 BUSINESS PHONE: 6102963400 MAIL ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FINANCIAL EXCHANGE CO OF PENNSYLVANIA INC CENTRAL INDEX KEY: 0001028660 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-18221-17 FILM NUMBER: 96683118 BUSINESS ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 BUSINESS PHONE: 6102963400 MAIL ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FINANCIAL EXCHANGE CO OF PITTSBURGH INC CENTRAL INDEX KEY: 0001028661 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-18221-18 FILM NUMBER: 96683119 BUSINESS ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 BUSINESS PHONE: 6102963400 MAIL ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FINANCIAL EXCHANGE CO OF VIRGINIA INC CENTRAL INDEX KEY: 0001028662 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-18221-19 FILM NUMBER: 96683120 BUSINESS ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 BUSINESS PHONE: 6102963400 MAIL ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LMS DEVELOPMENT CORP CENTRAL INDEX KEY: 0001028663 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-18221-20 FILM NUMBER: 96683121 BUSINESS ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 BUSINESS PHONE: 6102963400 MAIL ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MONETARY MANAGEMENT CORP CENTRAL INDEX KEY: 0001028664 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-18221-21 FILM NUMBER: 96683122 BUSINESS ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 BUSINESS PHONE: 6102963400 MAIL ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MONETARY MANAGEMENT CORP OF PENNSYLVANIA CENTRAL INDEX KEY: 0001028665 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-18221-22 FILM NUMBER: 96683123 BUSINESS ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 BUSINESS PHONE: 6102963400 MAIL ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MONETARY MANAGEMENT OF CALIFORNIA INC CENTRAL INDEX KEY: 0001028666 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-18221-23 FILM NUMBER: 96683124 BUSINESS ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 BUSINESS PHONE: 6102963400 MAIL ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MONETARY MANAGEMENT OF MARYLAND INC CENTRAL INDEX KEY: 0001028667 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-18221-24 FILM NUMBER: 96683125 BUSINESS ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 BUSINESS PHONE: 6102963400 MAIL ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MONETARY MANAGEMENT OF NEW YORK INC CENTRAL INDEX KEY: 0001028668 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-18221-25 FILM NUMBER: 96683126 BUSINESS ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 BUSINESS PHONE: 6102963400 MAIL ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PACIFIC RING ENTERPRISES INC CENTRAL INDEX KEY: 0001028669 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-18221-26 FILM NUMBER: 96683127 BUSINESS ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 BUSINESS PHONE: 6102963400 MAIL ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 FILER: COMPANY DATA: COMPANY CONFORMED NAME: US CHECK EXCHANGE LP CENTRAL INDEX KEY: 0001028670 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-18221-27 FILM NUMBER: 96683128 BUSINESS ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 BUSINESS PHONE: 6102963400 MAIL ADDRESS: STREET 1: 1436 LANCASTER AVENUE STREET 2: STE 210 CITY: BERWYN STATE: PA ZIP: 19312-1288 S-4 1 FORM S-4 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 19, 1996 REGISTRATION NO. 333- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 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) 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)
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) 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 - ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------
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) - ------------------------------------------------------------------------------ 10 7/8% Series A Senior Notes Due 2006..................... $110,000,000 100.000% $110,000,000 $33,334
- ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- (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. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ +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 . (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. 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 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 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 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 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 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 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 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 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 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 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.
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) 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........
10
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) 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
11
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) 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 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) 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
- ------- (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 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 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 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 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 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 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 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 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.
SEPTEMBER 30, 1996 ---------------------- PRO FORMA HISTORICAL AS ADJUSTED ---------- ----------- (DOLLARS IN THOUSANDS) 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 ======== ========
- -------- (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 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.
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) 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
21
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) 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
22 - -------- (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 $3.3 million for the year ended June 30, 1996. (7) Adjusted EBITDA is earnings before interest, taxes, depreciation, amortization, and loss on store closings and sales. Adjusted EBITDA does not represent cash flows as defined by generally accepted accounting principles and does not necessarily indicate that cash flows are sufficient to fund all of the Company's cash needs. Adjusted EBITDA should not be considered in isolation or as a substitute for net income (loss), cash flows from operating activities or other measures of liquidity determined in accordance with generally accepted accounting principles. The Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of revenues. 23 UNAUDITED CONDENSED COMBINED PRO FORMA FINANCIAL STATEMENTS The unaudited condensed combined pro forma statements of income for the fiscal year ended June 30, 1996 and for the three months ended September 30, 1996 set forth herein give effect to the Acquisitions as if the Acquisitions and the acquisition of Chex$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 $21.7 million from the Equity Transaction as if such transactions had occurred on July 1, 1995 and July 1, 1996, respectively. See notes to the unaudited condensed combined pro forma financial statements for further explanation of these transactions. The unaudited condensed combined pro forma balance sheet as of September 30, 1996 set forth herein gives effect to the Acquisitions and the Offering as if such transactions had occurred on September 30, 1996. The unaudited condensed combined pro forma financial statements are not necessarily indicative of what the Company's results of operations and balance sheet would have been had the Acquisitions, the Equity Transaction and the Offering been consummated at the indicated dates, nor are they necessarily indicative of the Company's results of operations and balance sheet for any future period. The unaudited condensed combined pro forma financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included elsewhere in this Prospectus. 24 UNAUDITED CONDENSED COMBINED PRO FORMA INCOME STATEMENT AND OTHER OPERATING DATA FOR THE FISCAL YEAR ENDED JUNE 30, 1996 (DOLLARS IN THOUSANDS)
ADJUSTMENTS FOR HISTORICAL(A) ACQUISITIONS, ----------------------------------------------------------------- EQUITY PRO TRANSACTION FORMA MONEY AND THE AS DFG CHEX$CASHED ANYKIND ABC MART(C) CASH-N-DASH C&C OFFERING ADJUSTED ------- ----------- ------- ------ ------- ----------- ------ ------------- -------- 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
25 UNAUDITED CONDENSED COMBINED PRO FORMA INCOME STATEMENT AND OTHER OPERATING DATA FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 (DOLLARS IN THOUSANDS)
HISTORICAL(B) ADJUSTMENTS ------------------------------------------------------ FOR ACQUISITIONS, PRO MONEY AND THE FORMA AS DFG ANYKIND ABC MART(C) CASH-N-DASH C&C OFFERING ADJUSTED ------- -------- ---- ------- ----------- ------ ------------- -------- 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
26 UNAUDITED CONDENSED COMBINED PRO FORMA BALANCE SHEET AS OF SEPTEMBER 30, 1996 (DOLLARS IN THOUSANDS)
AS ADJUSTED ADJUSTMENTS FOR THE DFG FOR THE OFFERING AND THE HISTORICAL OFFERING(J) ACQUISITIONS(K) ---------- ----------- ---------------- 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 $165,053 ======== ======== ========
27 NOTES TO UNAUDITED CONDENSED COMBINED PRO FORMA FINANCIAL DATA ACQUISITIONS As indicated below, the Company has made the following acquisitions since July 1995:
DATE OF PURCHASE BUSINESS PURCHASE PRICE -------- -------- ------------- Chex$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
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 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):
YEAR ENDED THREE MONTHS ENDED JUNE 30, 1996 SEPTEMBER 30, 1996 ------------- ------------------ 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 ====== ======
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):
YEAR ENDED THREE MONTHS ENDED JUNE 30, 1996 SEPTEMBER 30, 1996 ------------- ------------------ 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 ====== ======
These historical corporate expenses are not expected to be incurred by the Company in the future. 29 (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 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:
NUMBER COMPANY OF STORES MONTH ACQUIRED PURCHASE PRICE ------- --------- -------------- -------------- 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
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 Recent Events Since September 30, 1996, the Company has completed three significant acquisitions. The following table sets forth information with regard to the Acquisitions:
NUMBER COMPANY OF STORES MONTH ACQUIRED PURCHASE PRICE ------- --------- -------------- -------------- 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
- -------- (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:
THREE MONTHS SIX MONTHS ENDED ENDED JUNE 30, YEAR ENDED JUNE 30, SEPTEMBER 30, ----------------- ------------------- -------------- 1993 1994 1995 1996 1995 1996 -------- -------- --------- --------- ------ ------ 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% ======== ======== ========= ========= ====== ======
32 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 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 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 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 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 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 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 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 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 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 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
SIX MONTHS YEAR ENDED DECEMBER 31, ENDED ---------------------------------------- JUNE 30, 1991 1992 1993 1994 ------------ ------------ ------------ ------------ 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%
THREE MONTHS ENDED YEAR ENDED JUNE 30, SEPTEMBER 30, ------------------------------------------ ---------------------------------------- PRO FORMA PRO FORMA 1995 1996 1996 1995 1996 1996 ------------ ------------ -------------- ------------ ------------ ------------ 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%
43 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
SIX MONTHS YEAR ENDED DECEMBER 31, ENDED ------------------------------ JUNE 30, 1991 1992 1993 1994 -------- -------- ---------- ---------- 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%
THREE MONTHS ENDED YEAR ENDED JUNE 30, SEPTEMBER 30, ----------------------------------- -------------------- PRO FORMA 1995 1996 1996 1995 1996 ---------- ---------- ----------- -------- ---------- 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%
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. 44 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 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)
NUMBER OF 1996 GOVT. 1996 GOVERNMENT STORES UNDER CONTRACT TOTAL MARKET PERCENTAGE CONTRACT CONTRACT MARKET CONTRACT REVENUE REVENUES OF TOTAL SINCE EXPIRES(1) ------ ------------ ---------- ------------ ---------- -------- ---------- 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 --
- -------- (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 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 STORE OPERATIONS Locations The following chart sets forth the number of stores in operation as of the dates indicated:
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 ------- ---- ---- ---- ---- ---- ---- ------------- ----- ----------- --- ------------- 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
- -------- (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 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 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 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 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 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:
NAME AGE POSITION ---- --- -------- 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
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:
NAME AGE POSITION ---- --- -------- 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
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 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 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
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 ------------------ ---- -------- -------- ------------ ------------- ------------ 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
- -------- (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)
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 Jeffrey Weiss.............. 1,750/2,000 $1,050,000/$525,000 Donald Gayhardt............ 583/667 349,800/175,200
- -------- (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 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 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.
BENEFICIAL OWNER NUMBER PERCENT ---------------- --------- ------- 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%
- -------- (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 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 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 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 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 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 62 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. 63 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 64 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." 65 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. 66 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 67 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:
YEAR PERCENTAGE ---- ---------- 2001............................................. 105.438% 2002............................................. 103.625% 2003............................................. 101.813% 2004 and thereafter.............................. 100.000%
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. 68 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 69 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 70 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 71 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 72 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 73 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 74 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 75 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 76 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 77 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. 78 "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 79 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 80 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. 81 "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 82 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 83 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 84 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. 85 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 $240,000 respectively remained outstanding at September 30, 1996. The subordinated notes bear interest at the a reference rate plus 1% (9.25% at September 30, 1996). The notes are subordinated to all present and future obligations of the Company. See "Business--Legal Proceedings" for discussion of litigation concerning subordinated seller note in connection with the acquisition of the stores from ARI, Inc. 86 OTHER DEBT In connection with the acquisition of the companies conducting business as "Chex$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. 87 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. 88 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. 89 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. 90 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. 91 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. 92 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. 93 INDEX TO FINANCIAL STATEMENTS
PAGE ---- 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
F-1 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 DOLLAR FINANCIAL GROUP, INC. CONSOLIDATED BALANCE SHEETS (IN THOUSANDS EXCEPT SHARE AMOUNTS)
JUNE 30, --------------- SEPTEMBER 30, 1995 1996 1996 ------- ------- ------------- (UNAUDITED) 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 ======= ======= ========
See accompanying notes. F-3 DOLLAR FINANCIAL GROUP, INC. CONSOLIDATED STATEMENTS OF INCOME (IN THOUSANDS)
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 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 ======= ======= ======= ======= ====== =======
See accompanying notes. F-4 DOLLAR FINANCIAL GROUP, INC. CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY (IN THOUSANDS, EXCEPT SHARE DATA)
RETAINED COMMON STOCK ADDITIONAL EARNINGS TOTAL ------------- PAID-IN (ACCUMULATED NOTES UNEARNED SHAREHOLDER'S SHARES AMOUNT CAPITAL DEFICIT) RECEIVABLE COMPENSATION EQUITY ------ ------ ---------- ------------ ---------- ------------ ------------- PREDECESSOR COMPANY ------------------- 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 === === ======= ======= ===== ===== ======= SUCCESSOR COMPANY ----------------- 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 === === ======= ======= ===== ===== =======
See accompanying notes. F-5 DOLLAR FINANCIAL GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)
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 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
See accompanying notes. F-6 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). 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 =======
LIABILITIES Accounts payable and accrued expenses..................... $ 8,622 Debt.......................... 21,000 ------- 29,622 Shareholder's equity.......... 15,160 ------- TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY....... $44,782 =======
The Company, through its subsidiaries, provides retail financial and government contractual services to the general public through a network of approximately 155 locations operating as Check Mart(R), Chex$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 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 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 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):
JUNE 30, --------------- SEPTEMBER 30, 1995 1996 1996 ------- ------- ------------- 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 ======= ======= ========
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 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 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.
THREE MONTHS ENDED YEAR ENDED JUNE 30, SEPTEMBER 30, (UNAUDITED) (UNAUDITED) ------------------- ------------------- 1995 1996 1995 --------- --------- ------------------- (DOLLARS IN THOUSANDS) Total revenues............ $ 42,264 $ 43,699 $11,014 Net income (loss)......... $ 906 $ (2,185) $ (162)
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):
JUNE 30, ------------- SEPTEMBER 30, 1995 1996 1996 ------ ------ ------------- 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 ====== ====== ======
F-12 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):
JUNE 30, SEPTEMBER 30, --------------- ------------- 1995 1996 1996 ------- ------- ------------- 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 ======= ======= =======
F-13 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): 1997........................................... $ 8,673 1998........................................... 6,470 1999........................................... 7,152 2000........................................... 7,630 2001........................................... 12,605 ------- $42,530 =======
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 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):
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 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 ==== ==== ====== ======= ====== =======
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):
JUNE 30, ----------- SEPTEMBER 30, 1995 1996 1996 ---- ------ ------------- 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 ==== ====== ======
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 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):
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 -------------------------- --------------------------------- 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 ==== ==== ====== ======= ====== =======
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 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):
YEAR AMOUNT ---- ------ 1997............................................ $2,716 1998............................................ 2,047 1999............................................ 1,405 2000............................................ 988 2001............................................ 524 Thereafter...................................... 193 ------ $7,873 ======
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 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 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. 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 =======
F-19 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 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 ANY KIND CHECK CASHING CENTERS, INC. AND CONSOLIDATED PARTNERSHIP CONSOLIDATED BALANCE SHEETS
DECEMBER 31, JUNE 30, ----------------------- ----------- 1994 1995 1996 ASSETS ----------- ----------- ----------- (UNAUDITED) 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 =========== =========== ===========
See Notes to Consolidated Financial Statements. F-22 ANY KIND CHECK CASHING CENTERS, INC. AND CONSOLIDATED PARTNERSHIP CONSOLIDATED STATEMENTS OF INCOME
SIX MONTHS ENDED YEAR ENDED DECEMBER 31, JUNE 30, ------------------------------------- ------------------------ 1993 1994 1995 1995 1996 ----------- ----------- ----------- ----------- ----------- (UNAUDITED) 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 =========== =========== =========== =========== ===========
See Notes to Consolidated Financial Statements. F-23 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
MINORITY INTEREST IN RETAINED CONSOLIDATED EARNINGS PARTNERSHIP ----------- ------------ 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 =========== =========
See Notes to Consolidated Financial Statements. F-24 ANY KIND CHECK CASHING CENTERS, INC. AND CONSOLIDATED PARTNERSHIP CONSOLIDATED STATEMENTS OF CASH FLOWS
YEAR ENDED SIX MONTHS ENDED DECEMBER 31, JUNE 30, ------------------------------------- ------------------------ 1993 1994 1995 1995 1996 ----------- ----------- ----------- ----------- ----------- (UNAUDITED) 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 $ -- $ -- $ -- =========== =========== =========== =========== ===========
See Notes to Consolidated Financial Statements. F-25 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 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:
1994 1995 -------- -------- 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 ======== ========
NOTE 4. NOTES PAYABLE AND LONG-TERM DEBT Notes payable: 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 ==========
Long-term debt: 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 ==========
- -------- (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 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:
YEAR ENDING DECEMBER 31, ------------ 1996........................................................... $1,758,340 1997........................................................... 1,323,366 1998........................................................... 818,512 1999........................................................... 403,066 2000........................................................... 129,536 ---------- $4,432,820 ==========
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 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:
1993 1994 1995 ------- ------- -------- Current, state income taxes....................... $46,278 $66,698 $ 86,459 Deferred.......................................... -- -- (91,000) ------- ------- -------- $46,278 $66,698 $ (4,541) ======= ======= ========
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.
1993 1994 1995 ---- ---- ------- Deferred Tax Assets State income taxes....................................... $-- $-- $27,000 Accrued expenses......................................... -- -- 56,000 Receivable allowance..................................... -- -- 8,000 ---- ---- ------- $-- $-- $91,000 ==== ==== =======
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 $31,000,000. Prior to the sale, the Company distributed all of the assets and liabilities to the stockholders except certain prepaid expenses, rent deposits, leasehold improvements and equipment. The bank line of credit was extended to August 1, 1996 and canceled upon sale of the stock. No amounts were outstanding at the time of cancellation. No adjustments have been made to the carrying values of assets or liabilities as a result of the sale of stock. F-29 REPORT OF INDEPENDENT AUDITORS The Board of Directors and Shareholders DFG Holdings, Inc. We have audited the accompanying combined statements of income and of cash flows of L.M.S. Development Corporation, Pacific Ring Enterprises, Inc., and NCCI Corporation, collectively doing business as Chex$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$Cashed, for the year ended December 31, 1994, in conformity with generally accepted accounting principles. /s/ Ernst & Young LLP Philadelphia, Pennsylvania August 30, 1996 F-30 L.M.S. DEVELOPMENT CORPORATION, PACIFIC RING ENTERPRISES, INC., AND NCCI CORPORATION, COLLECTIVELY DOING BUSINESS AS CHEX$CASHED COMBINED STATEMENT OF INCOME YEAR ENDED DECEMBER 31, 1994 (DOLLARS IN THOUSANDS) 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 ======
See accompanying notes. F-31 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) 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................................................... $2,458 ======
See accompanying notes. F-32 L.M.S. DEVELOPMENT CORPORATION, PACIFIC RING ENTERPRISES, INC., AND NCCI CORPORATION, COLLECTIVELY DOING BUSINESS AS CHEX$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 $68,000 in 1994. F-33 L.M.S. DEVELOPMENT CORPORATION, PACIFIC RING ENTERPRISES, INC., AND NCCI CORPORATION, COLLECTIVELY DOING BUSINESS AS CHEX$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): 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 ======
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): Federal: Current............................................................. $55 Deferred............................................................ -- --- 55 State: Current............................................................. 12 Deferred............................................................ -- --- 12 --- $67 ===
F-34 L.M.S. DEVELOPMENT CORPORATION, PACIFIC RING ENTERPRISES, INC., AND NCCI CORPORATION, COLLECTIVELY DOING BUSINESS AS CHEX$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): 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 ====
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):
YEAR AMOUNT ---- ------ 1995............................................................... $ 355 1996............................................................... 341 1997............................................................... 301 1998............................................................... 211 1999............................................................... 134 Thereafter......................................................... 94 ------ $1,436 ======
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 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 NATIONAL MONEY MART INC. CONSOLIDATED BALANCE SHEET
AS AT DECEMBER 31, AS AT ------------------- SEPTEMBER 30, 1994 1995 1996 --------- --------- ------------- $CN $CN $CN (UNAUDITED) 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 ========= ========= =========
Approved on behalf of the Directors: Director Director See accompanying notes F-37 NATIONAL MONEY MART INC. CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS
NINE MONTHS ENDED YEAR ENDED DECEMBER 31, SEPTEMBER 30, ----------------------- ------------------- 1994 1995 1995 1996 ----------- ----------- --------- --------- $CN $CN $CN $CN (UNAUDITED) 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 =========== =========== ========= =========
See accompanying notes F-38 NATIONAL MONEY MART INC. CONSOLIDATED STATEMENT OF CASH FLOWS
NINE MONTHS ENDED YEAR ENDED DECEMBER 31, SEPTEMBER 30, ------------------------- --------------------- 1994 1995 1995 1996 ----------- ------------ ---------- --------- $CN $CN $CN $CN (UNAUDITED) 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 =========== ============ ========== =========
See accompanying notes F-39 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:
INVESTEE % INTEREST -------- ---------- Calgary Money Mart Partnership.................................... 13.5 Gent Isle Holdings Ltd............................................ 28 First Island Armoured Transport Ltd............................... 50
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: Automobile............................................................... 30% Furniture and equipment.................................................. 20% Leasehold improvements................................................... 20% Goodwill................................................................. 10%
F-40 NATIONAL MONEY MART INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED) 2. INVESTMENTS AND ADVANCES
1994 1995 ------- ------- $CN $CN 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 ======= =======
3. CAPITAL ASSETS
1994 -------------------------------- ACCUMULATED NET BOOK COST AMORTIZATION VALUE $CN $CN $CN --------- ------------ --------- 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 ========= ========= ========= 1995 -------------------------------- ACCUMULATED NET BOOK COST AMORTIZATION VALUE $CN $CN $CN --------- ------------ --------- 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 ========= ========= =========
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 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
1994 1995 ---- ---- $CN $CN Authorized 10,000 Class A common shares..................................... Issued 10,000 Class A common shares..................................... 300 300
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:
$CN --------- 1996............................................................... 1,081,000 1997............................................................... 937,000 1998............................................................... 692,000 1999............................................................... 543,000 2000............................................................... 89,000 --------- 3,342,000 ---------
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 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 CASH-N-DASH CHECK CASHING, INC. BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE AMOUNTS)
DECEMBER 31, SEPTEMBER 30, -------------- ------------- 1994 1995 1996 ------ ------ ------------- (UNAUDITED) 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 ====== ====== ======
See accompanying notes. F-44 CASH-N-DASH CHECK CASHING, INC. STATEMENTS OF INCOME (IN THOUSANDS)
NINE MONTHS ENDED YEAR ENDED DECEMBER 31, SEPTEMBER 30, ----------------------- ------------- 1994 1995 1995 1996 ----------- ----------- ------ ------ (UNAUDITED) 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 =========== =========== ====== ======
See accompanying notes. F-45 CASH-N-DASH CHECK CASHING, INC. STATEMENTS OF SHAREHOLDERS' EQUITY (IN THOUSANDS EXCEPT SHARE DATA)
COMMON STOCK ACCUMULATED TREASURY SHAREHOLDERS' SHARES AMOUNT DEFICIT STOCK EQUITY ------ ------ ----------- -------- ------------- 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) ===== ==== ====== ==== ======
See accompanying notes. F-46 CASH-N-DASH CHECK CASHING, INC. STATEMENTS OF CASH FLOWS (IN THOUSANDS)
NINE MONTHS YEAR ENDED ENDED DECEMBER 31, SEPTEMBER 30, --------------- ---------------- 1994 1995 1995 1996 ------ ------- ------- ------- (UNAUDITED) 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 ====== ======= ======= =======
See accompanying notes. F-47 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 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):
DECEMBER 31, ------------- SEPTEMBER 30, 1994 1995 1996 ------ ------ ------------- 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 ====== ====== =====
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 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):
YEAR AMOUNT ---- ------ 1996.................................. $ 484 1997.................................. 347 1998.................................. 126 1999.................................. 56 2000.................................. 4 ------ $1,017 ======
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:
NINE MONTHS YEAR ENDED ENDED DECEMBER 31, SEPTEMBER 30, ------------ ------------- CONTRACT 1994 1995 1995 1996 EXPIRES ----- ------ ------ ------ -------- (In Thousands) 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 ===== ====== ====== ======
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 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- 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
PAGE ---- 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
- ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- $110,000,000 DOLLAR FINANCIAL GROUP, INC. 10 7/8% SERIES A SENIOR NOTES DUE 2006 ------------------ PROSPECTUS ------------------ , 199 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- 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
EXHIBIT NO. DESCRIPTION OF DOCUMENT ----------- ----------------------- 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.
II-1
EXHIBIT NO. DESCRIPTION OF DOCUMENT ----------- ----------------------- (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.**
II-2
EXHIBIT NO. DESCRIPTION OF DOCUMENT ----------- ----------------------- 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.**
II-3
EXHIBIT NO. DESCRIPTION OF DOCUMENT ----------- ----------------------- 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.**
-------- ** To be filed by amendment. (b) FINANCIAL STATEMENT SCHEDULES
SCHEDULE NUMBER DESCRIPTION --------------- -----------
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 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.
SIGNATURE TITLE DATE --------- ----- ---- /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)
II-5 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.
SIGNATURE TITLE DATE --------- ----- ---- /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)
II-6 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.
SIGNATURE TITLE DATE --------- ----- ---- /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)
CHECK MART OF UTAH, INC. CHECK MART OF WASHINGTON, INC.
SIGNATURE TITLE DATE --------- ----- ---- /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)
II-7 CHECK MART OF WISCONSIN, INC. L.M.S. DEVELOPMENT CORPORATION PACIFIC RING ENTERPRISES
SIGNATURE TITLE DATE --------- ----- ---- /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)
DFG WAREHOUSING CO., INC.
SIGNATURE TITLE DATE --------- ----- ---- /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)
II-8 DOLLAR FINANCIAL INSURANCE CORP. DOLLAR INSURANCE ADMINISTRATION CORP.
SIGNATURE TITLE DATE --------- ----- ---- /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)
MONETARY MANAGEMENT CORP.
SIGNATURE TITLE DATE --------- ----- ---- /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)
U.S. CHECK EXCHANGE LIMITED PARTNERSHIP BY: ANY KIND CHECK CASHING CENTERS, INC. AS GENERAL PARTNER
SIGNATURE TITLE DATE --------- ----- ---- /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)
II-9 EX-3.1(A)(I) 2 CERTIFICATE OF INCORPORATION Exhibit 3.1(a)(i) 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. 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. 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 EX-3.1(A)(II) 3 CERTIFICATE OF CHANGE Exhibit 3.1(a)(ii) 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. 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 EX-3.1(A)(III) 4 CHANGE OF CERTIFICATE OF INCORPORATION Exhibit 3.1(a)(iii) 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 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 EX-3.1(A)(IV) 5 AMENDMENT TO CERTIFICATE OF INCORPORATION Exhibit 3.1(a)(iv) 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. 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 EX-3.1(B)(I) 6 ARTICLES OF INCORPORATION Exhibit 3.1(b)(i) 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 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 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 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 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 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 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 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 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 EX-3.1(C)(I) 7 ARTICLES OF INCORPORATION Exhibit 3.1(c)(i) 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. 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, 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 ----------------------------------- 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 ----------------------------------- 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 ------------------------- 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 EX-3.1(C)(II) 8 AMENDED ARTICLES OF INCORPORATION Exhibit 3.1(c)(ii) 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. 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. 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 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 EX-3.1(D)(I) 9 ARTICLES OF INCORPORATION Exhibit 3.1(d)(i) 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. 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 EX-3.1(E)(I) 10 CERTIFICATE OF INCORPORATION Exhibit 3.1(e)(i) 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 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 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 EX-3.1(F)(I) 11 ARTICLES OF INCORPORATION Exhibit 3.1(f)(i) 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 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 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 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. 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; 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 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 EX-3.1(F)(II) 12 AMENDMENT TO ARTICLES OF INCORPORATION Exhibit 3.1(f)(ii) 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: 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 EX-3.1(G)(I) 13 ARTICLES OF INCORPORATION Exhibit 3.1(g)(i) 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 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 EX-3.1(H)(I) 14 ARTICLES OF INCORPORATION Exhibit 3.1(h)(i) 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 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: 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 EX-3.1(I)(I) 15 ARTICLES OF INCORPORATION Exhibit 3.1(i)(i) 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 EX-3.1(I)(II) 16 AMENDMENT TO ARTICLESOF INCORPORATION Exhibit 3.1(i)(ii) 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 EX-3.1(J)(I) 17 ARTICLES OF INCORPORATION Exhibit 3.1(j)(i) 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. 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 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. 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 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 EX-3.1(J)(II) 18 AMENDMENT OF ARTICLES OF INCORPORATION Exhibit 3.1(j)(ii) 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) 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 EX-3.1(K)(I) 19 ARTICLES OF INCORPORATION Exhibit 3.1(k)(i) 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 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 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 EX-3.1(L)(I) 20 ARTICLES OF INCORPORATION Exhibit 3.1(l)(i) 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 EX-3.1(M)(I) 21 CERTIFICATE OF INCORPORATION Exhibit 3.1(m)(i) 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. 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 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 EX-3.1(N)(I) 22 ARTICLES OF INCORPORATION Exhibit 3.1(n)(i) 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. 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 EX-3.1(O)(I) 23 CERTIFICATE OF INCORPORATION Exhibit 3.1(o)(i) 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 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 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 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 EX-3.1(P)(I) 24 ARTICLES OF INCORPORATION Exhibit 3.1(p)(i) 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 $_____ 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 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 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 EX-3.1(P)(II) 25 AMENDMENT TO ARTICLES OF INCORPORATION Exhibit 3.1(p)(ii) 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] 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 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] 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. 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] 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 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 EX-3.1(Q)(I) 26 ARTICLES OF INCORPORATION Exhibit 3.1(q)(i) 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. 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 EX-3.1(Q)(II) 27 AMENDMENT TO ARTICLES OF INCORPORATION Exhibit 3.1(q)(ii) 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 EX-3.1(Q)(III) 28 AMENDMENT TO ARTICLES OF INCORPORATION Exhibit 3.1(q)(iii) 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: 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 EX-3.1(R)(I) 29 CERTIFICATE OF INCORPORATION Exhibit 3.1(r)(i) 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): 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) 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 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 EX-3.1(R)(II) 30 AMENDMENT TO CERTIFICATE OF INCORPORATION Exhibit 3.1(r)(ii) 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 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 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 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. EX-3.1(R)(III) 31 AMENDMENT TO CERTIFICATE OF INCORPORATION Exhibit 3.1(r)(iii) 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." 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 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 EX-3.1(S)(I) 32 CERTIFICATE OF INCORPORATION Exhibit 3.1(s)(i) 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. 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 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 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. 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 EX-3.1(T)(I) 33 CERTIFICATE OF INCORPORATION Exhibit 3.1(t)(i) 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. 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 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 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 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. 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 EX-3.1(U)(I) 34 ARTICLES OF INCORPORATION Exhibit 3.1(u)(i) 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. 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 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 EX-3.1(V)(I) 35 ARTICLES OF INCORPORATION Exhibit 3.1(v)(i) ARTICLES OF INCORPORATION-FOR PROFIT DSCB:15-1306/2102/2303/2702/2903/7102A (Rev 90) Indicate type of domestic corporation (check one):
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) --- ---
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:
(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
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: ---------------------------------------------- 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 EX-3.1(X)(I) 36 ARTICLES OF INCORPORATION Exhibit 3.1(x)(i) 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: 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 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 EX-3.1(Y)(I) 37 ARTICLES OF INCORPORATION Exhibit 3.1(y)(i) 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 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. 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 EX-3.1(Z)(I) 38 CERTIFICATE OF INCORPORATION Exhibit 3.1(z)(i) 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. 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 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 EX-3.1(AA)(I) 39 ARTICLES OF INCORPORATION Exhibit 3.1(aa)(i) 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." 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 EX-3.1(BB)(I) 40 LIMITED PARTNERSHIP CERTIFICATE AND AGREEMENT Exhibit 3.1(bb)(i) 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. 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. 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. 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. 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 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. 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, 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; 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; 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: 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. 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. 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. 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. 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: 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; 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 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; 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. 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: 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. 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; 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 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 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 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. 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, 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 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 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, 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 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. 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 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. 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 --------------------------------- 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 ------------------------- 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 ------------------------- 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 EX-3.1(BB)(II) 41 AMENDMENT TO LP CERTIFICATE AND AGREEMENT Exhibit 3.1(bb)(ii) 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 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. 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; 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 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 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 --------------------------- GNS DEVELOPMENT CORPORATION BY /s/ George H. Brimhall ---------------------------- ITS President --------------------------- NYFS06...:\47\41847\0008\1710\FRMD126Z.270 EX-3.1(BB)(III) 42 AMENDMENT TO LP CERTIFICATE AND AGREEMENT Exhibit 3.1(bb)(iii) 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. ------------------------------------------------------------ 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 --------------------------- 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 --------------------------- /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 --------------------------- 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 EX-3.2(A)(I) 43 BY-LAWS Exhibit 3.2(a)(i) 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 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 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 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 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. 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. 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. 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 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. 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 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. 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 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 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 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 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 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 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 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 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 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 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 EX-3.2(B)(I) 44 BY-LAWS Exhibit 3.2(b)(i) 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 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 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 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 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 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. 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 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. 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 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 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- 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. 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 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 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 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. 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 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. 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 EX-3.2(C)(I) 45 BY-LAWS Exhibit 3.2(c)(i) 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, 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 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 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 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 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 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 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 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. 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 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. 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 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. 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 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 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. 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. 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. 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 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. 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 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. 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 EX-3.2(D)(I) 46 BY-LAWS Exhibit 3.2(d)(i) 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 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, 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 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 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, 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, 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 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 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 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 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 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 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, 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. 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 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 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 EX-3.2(E)(I) 47 BY-LAWS Exhibit 3.2(e)(i) 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 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. 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, 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. 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. 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. 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 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. 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. 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 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. (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. 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 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. 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 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 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 EX-3.2(F)(I) 48 BY-LAWS Exhibit 3.2(f)(i) 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 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 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 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. 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 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 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 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 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. 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. 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 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, 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. ADOPTION OF BYLAWS ------------------- The foregoing Bylaws are hereby adopted by the Corporation. DATE: May 8, 1985 -------------------- NYFS06...:\47\41847\0008\1710\ARTD126L.060 EX-3.2(G)(I) 49 BY-LAWS Exhibit 3.2(g)(i) 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 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, 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 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. 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 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 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. 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 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. 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 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: (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 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 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 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 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 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 EX-3.2(H)(I) 50 BY-LAWS Exhibit 3.2(h)(i) 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 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 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, 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 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 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 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 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. 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 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 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; (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 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. 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 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 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 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 EX-3.2(I)(I) 51 BY-LAWS Exhibit 3.2(i)(i) 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 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 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 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 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, 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 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. 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. 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, 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. 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. 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 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. 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. 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 EX-3.2(J)(I) 52 BY-LAWS Exhibit 3.2(j)(i) 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) 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 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. 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 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. 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. 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 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 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. 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 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. 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. 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 EX-3.2(K)(I) 53 BY-LAWS Exhibit 3.2(k)(i) 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 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 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 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. 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 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 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 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. 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 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 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; (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 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. 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 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 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 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 EX-3.2(L)(I) 54 BY-LAWS Exhibit 3.2(l)(i) 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. 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 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. 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 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 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 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 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. 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 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, 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 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 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 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. 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 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 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 EX-3.2(M)(I) 55 BY-LAWS Exhibit 3.2(m)(i) 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 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 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 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. 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 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 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. 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. 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 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 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. 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. 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. 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 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 EX-3.2(N)(I) 56 BY-LAWS Exhibit 3.2(n)(i) 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 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. 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, 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 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. 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, 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 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 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 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. 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 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 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 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 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: (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. (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. 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. 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 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 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 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 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 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. (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: (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 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. 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 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 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. 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 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 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 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 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. 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, 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 EX-3.2(O)(I) 57 BY-LAWS Exhibit 3.2(o)(i) 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 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 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. 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 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. 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. 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. 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 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 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 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 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. 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 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 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 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, 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. 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 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 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 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. 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, -------- 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 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 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 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. 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 EX-3.2(P)(I) 58 BY-LAWS Exhibit 3.2(p)(i) 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 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. 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. 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 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 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. 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, 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 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 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 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 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 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. 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. 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 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 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 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. 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 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 EX-3.2(Q)(I) 59 BY-LAWS Exhibit 3.2(q)(i) 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 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, 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 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 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 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 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. 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 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 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. 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 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 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 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 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. 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. 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 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 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 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 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 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 EX-3.2(R)(I) 60 BY-LAWS Exhibit 3.2(r)(i) 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 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 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 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 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 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. 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 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 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. 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 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. 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 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 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. 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. 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 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 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 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. 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. 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 EX-3.2(S)(I) 61 BY-LAWS Exhibit 3.2(s)(i) 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. 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 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. 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 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, 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 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 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 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 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 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 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 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 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 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. 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 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. 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. 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. 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 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 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 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 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. 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 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, 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 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 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- 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. 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 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 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 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 EX-3.2(T)(I) 62 BY-LAWS Exhibit 3.2(t)(i) 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 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. 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 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 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, 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. 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 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 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 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. 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 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 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. 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. 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. 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 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 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 (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 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. 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 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 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 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 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 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. 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. 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. 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 EX-3.2(U)(I) 63 BY-LAWS Exhibit 3.2(u)(i) 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 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, 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. 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 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 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 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. 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 EX-3.2(V)(I) 64 BY-LAWS Exhibit 3.2(v)(i) 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. 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. (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: (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 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 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. 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 (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. (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 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 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 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 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. (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, 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 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. 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 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 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 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 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 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 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 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. (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 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 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. -------------------- (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. 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. --------------------------------- (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; (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 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 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 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 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 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 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 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 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 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 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 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 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 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- 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 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. (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 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 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. (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: (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 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 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 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 EX-3.2(W)(I) 65 BY-LAWS Exhibit 3.2(w)(i) 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 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 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, 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 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 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 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. 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 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 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. 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 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. 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 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. 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 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 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. 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 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. 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 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 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 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 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 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 EX-3.2(X)(I) 66 BY-LAWS Exhibit 3.2(x)(i) 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 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. 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 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 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. 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 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. 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. 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. 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 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 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. 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 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. 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. 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. 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, 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 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 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. 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 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. 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 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 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 EX-3.2(Y)(I) 67 BY-LAWS Exhibit 3.2(y)(i) 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 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 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 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. 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 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 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. 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 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. 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 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: (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. 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 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. 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 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 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 EX-3.2(Z)(I) 68 BY-LAWS Exhibit 3.2(z)(i) 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 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 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 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. 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 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 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 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 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 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. 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 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. 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. 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. 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 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. 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 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 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 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 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 EX-4.1 69 INDENTURE AGREEMENT Exhibit 4.1 ================================================================================ 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 ================================================================================ 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. 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 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 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 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 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 v 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. "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 2 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. 3 "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 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 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 "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 "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 8 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 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. 10 "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. 11 SECTION 1.02. OTHER DEFINITIONS.
Defined in Term Section ---- ------- "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
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. 12 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 13 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. 14 (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 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 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: 17 (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): 18 (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: 19 (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, 20 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, 21 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 22 (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, 23 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. 24 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 25 (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: 26 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: 27 (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 28 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. 29 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. 30 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 31 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. 32 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 33 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 34 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 35 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. 36 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 37 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. 38 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; 39 (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 40 (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% 41 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. 42 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, 43 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. 44 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. 45 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. 46 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. 47 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 48 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 49 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 50 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. 51 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: 52 (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. 53 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. 54 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 55 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; 56 (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. 57 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 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 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 (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 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 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 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 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 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 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 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 Dated as of November 15, 1996 FLEET NATIONAL BANK as Trustee By:/s/ Frank McDonald --------------------- Frank McDonald Vice President 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 (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 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 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 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 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 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 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 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 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:
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 - ---------------- ---------------- ---------------- ------------- --------------
- -------- (2) This should be included only if the Note is issued in global form. A-1-10 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 (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 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 "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 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:
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 - ---------------- ---------------- ---------------- ------------- --------------
A-2-5 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 (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 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 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 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 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 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 [_] 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 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 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 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 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 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 EX-4.3 70 REGISTRATION RIGHTS AGREEMENT Exhibit 4.3 - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ 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. - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ 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. 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 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 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 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 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 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 7 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 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 (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 10 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 11 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. 12 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. 13 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. 14 (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 15 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 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 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 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 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 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 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 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 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 LEHMAN BROTHERS INC. BA SECURITIES, INC. By: LEHMAN BROTHERS INC. By: /s/ Theodore J. Davies -------------------------- Theodore J. Davies Associate 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 EX-10.1(A) 71 ASSET PURCHASE AGREEMENT Exhibit 10.1(a) 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 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: 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- 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- 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- 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- 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- 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, -7- 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 -8- 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 -9- 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 -10- 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, -11- 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; -12- (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 -13- 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, -14- (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]. -15- 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. -16- (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 -17- 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. -18- 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. -19- (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 -20- 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 -21- 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 -22- 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. -23- 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. -24- 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 -25- 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 -26- 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 -27- (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. -28- (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 -29- 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 -30- 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 -31- 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 ---------------------------- -32- SCHEDULES AND EXHIBITS TO ASSET PURCHASE AGREEMENT JANUARY 9, 1995 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 1.2(b) Personal Property 1.2(c) Real Property Leasehold interest in each of Stores listed on Exhibit A. 1.2(e) Intellectual Property, etc. [None] 3.1 Allocation of Purchase Price Furniture, Fixtures and Equipment $ 300,000 Goodwill 2,400,000 ---------- $2,700,000 5.2(a) Required Consents, Approvals, Authorizations, Waivers and Notices Landlord's Consent to Assignment of Lease for each Store being acquired. 5.2(c)(iii) Acceleration of Debts and Obligations [None] 5.8(a) Compensation of Employees 5.8(b) Employee Disputes; Termination of Employment [None] 5.9 Employee Benefit Plans, etc. [None] 5.11(a) Contracts 1. JM Security 2. Spectaguard Security 3. Land Security 4. Sheppard Security 5. Leases for each of the Stores * 6.2 Consents required by Purchaser - Final approval of Purchaser's bank(s) - Licenses from various state and other authorities EXHIBIT A Promissory Note Exhibit B Intentionally Deleted Exhibit C Non-Competition Agreement EX-10.1(B) 72 AMEND NO 1 TO ASSET PURCHASE AGREEMENT Exhibit 10.1(b) 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. 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 EX-10.2 73 PURCHASE AGREEMENT Exhibit 10.2 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 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"; 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- 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- (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- 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- 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- 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- 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- 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- 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. -10- (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 -11- 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. -12- 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. -13- (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; -14- (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- 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 -16- 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. -17- 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. -18- 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, -19- (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. -20- 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. -21- 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 -22- 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. -23- 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, -24- 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. -25- (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 -26- 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, -27- 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. -28- 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. -29- (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. -30- 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. -31- (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 -32- 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 -33- 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- 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- 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- (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- (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- 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- 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- 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- 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- E. RICK SAFFORD /s/ E. Rick Safford ____________________________________________ FRED T. KAMPO, JR. /s/ Fred T. Kampo, Jr. ____________________________________________ -43- SCHEDULES AND EXHIBITS TO PURCHASE AGREEMENT DATED JULY 28, 1995 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 5.11(a) Contracts 5.13 Environmental Matters 6.2 Consents required by Purchaser 14(a) Star Store Leases 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 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. SCHEDULE 6.2 ------------ CONSENTS REQUIRED BY PURCHASER ------------------------------ 1. Financing Approval 2. Arizona, California, Ohio and Wisconsin licenses to operate Stores. SCHEDULE 6.3 ------------ PURCHASER FINANCIAL STATEMENT ----------------------------- 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 EX-10.7 74 PURCHASE AGREEMENT Exhibit 10.7 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 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 -------------------------- 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 ----------- 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 ----------------------- 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 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; 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, 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, 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 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 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. 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 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 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 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 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 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 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 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 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 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 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); (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 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 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 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 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 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 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 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 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 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 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; (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. 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 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 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 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. 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; (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 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 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. 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 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 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"). 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 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. ---------- (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. 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, 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 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; (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; (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; (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 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 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. (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 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, 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 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 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 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. "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 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 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 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. "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. "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. "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. "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. "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. "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. 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. 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 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 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 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 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 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 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 EX-10.11 75 PURCHASE AGREEMENT Exhibit 10.11 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 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 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 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 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 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 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 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 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; 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, 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, 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. (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 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 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 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. (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; (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 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. (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 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 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 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; (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 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 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. (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 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 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. (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 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 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 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 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. 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. (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. (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. 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 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 (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 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 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 (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 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). 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. 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 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; (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; (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; (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. 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 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- 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 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 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, 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): (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 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; (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; (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 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. 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. 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 (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 (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 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 (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 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. 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. "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. "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. -------------------- "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 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. "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 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 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. "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 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. "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. "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, 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. 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 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 -------- ------- 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 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). 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 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 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 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 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 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 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. 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 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 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; (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; (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 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, 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 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. 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 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 EX-12.1 76 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES Exhibit 12.1
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 ---- ---- ---- ---- ---- ---- ---- ---- ---- 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) $ -- $ -- $ -- ======= ======= ======= ======= ====== ======= ===== ===== ========
NYFS06...:\47\41847\0008\6678\TBLD186C.130 EX-23.2 77 CONSENT OF ERNST & YOUNG LLP Exhibit 23.2 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 EX-23.3 78 CONSENT OF MCGLADREY & PULLEN LLP Exhibit 23.3 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 EX-23.4 79 CONSENT OF ERNST & YOUNG Exhibit 23.4 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 EX-27.1 80 FINANCIAL DATA SCHEDULE
5 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. 1,000 0001028643 DOLLAR FINANCIAL GROUP INC YEAR JUN-30-1996 JUN-30-1996 22,545 0 4,441 0 0 28,776 5,271 1,926 67,444 18,945 0 0 0 0 13,707 67,444 42,430 42,430 0 42,327 0 0 3,385 (3,282) (1,214) (2,068) 0 0 0 (2,068) 0 0
EX-27.2 81 FINANCIAL DATA SCHEDULE
5 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. 1,000 0001028643 DOLLAR FINANCIAL GROUP INC 3-MOS JUN-30-1996 SEP-30-1996 41,784 0 5,098 0 0 48,873 6,950 2,240 127,643 21,886 0 0 0 0 37,411 127,643 13,645 13,645 0 11,989 0 0 1,358 298 246 52 0 0 0 52 0 0
-----END PRIVACY-ENHANCED MESSAGE-----